Penrice Soda is confident the worst is behind it as cash flow improves following $140 million of losses in the past three years. At its June 30 balance date, liabilities exceeded assets by $46.6 million, resulting in auditor Ernst & Young qualifying its accounts for the second year running due to "material uncertainty ... about the ... group's ability to continue as going concerns", it said in the annual report.
Chairman David Trebeck told shareholders at Tuesday's annual meeting that liquidity remained tight, "further challenged by lumpiness in individual expenditure and revenue items".
A debt restructure was being negotiated. Penrice has $110 million of debt and $127.5 million of accumulated losses. The company's forecast for the rest of the financial year is for "a modest, but gradually improving ... positive net free cash flow."
A strong dollar, weak demand and product prices forced the group to close its soda ash plant and shift to imports. Its future now hinges on developing the quicklime market, renegotiating debt and recapitalising.
In the year to June, the loss per share totalled 54.8¢, down from the loss of 69.6¢ a share a year earlier. The net loss fell to $50.1 million from $63.5 million.