|
|
Jet's stocks crash as auditors' doubt resurrection plan
|
|
|
|
Top Stories |
|
|
|
|
SME Times News Bureau | 25 May, 2018
A day after Jet Airways' auditors red-flagged its future plans on cost
reduction and fund mobilisation to avert "uncertainties" created by a
sudden announcement of a net loss, the company's stocks crashed by over 7
per cent.
The plunge in Jet's scrip comes after the auditors
expressed their doubt over the appropriateness of preparing the
company's financial results "on a going concern basis".
For the
uninitiated a "going concern basis" is an accounting term which
basically refers to a firm's ability to generate enough financial
resources to stay in business or avoid bankruptcy.
"The
appropriateness of assumption of going concern is dependent upon
realisation of the various initiatives undertaken by the company and or
the company's ability to raise requisite finance or generate cash flows
in future to meet its obligations, including financial support to its
subsidiary companies," Jet Airways' auditors had said.
"Our opinion is not modified in respect of this matter."
The
'Notes to the Accounts' had stated that: "... the statement of
financial results continues to be prepared on a going concern basis,
which contemplates realisation of assets and settlement of liabilities
in the normal course of business including financial support to its
subsidiaries."
When contacted a Jet Airways' spokesperson told
IANS: "Point 13 note has been part of the 'Notes to the Accounts' for
the last many years."
In addition, the spokesperson denied
concerns that the dismal financial performance and auditors' concerns
might lead to the firms' strategic partner, Etihad Airways, withdrawing
its 'Bank Guarantee' extended for various loans and working capital for
Jet Airways.
"The information is completely baseless and untrue," the spokesperson said.
The
Indian passenger carrier's denial came after sources revealed that
Etihad Airways might consider withdrawing its Rs 3,000 crore 'Bank
Guarantee' for various loans and working capital of Jet Airways.
A query sent to Etihad did not elicit a response. Currently, Etihad Airways owns a 24 per cent stake in Jet Airways.
However, investors were not convinced and dumped the stock.
On
Thursday, Jet's stocks on the BSE plunged by 7.03 per cent or Rs 29.60
to Rs 391.55 per share from its previous close of Rs 421.15 per share.
The airline's scrip had declined by over 10 per cent during the intra-day to Rs 376.60 per share.
On
Wednesday, the company reported a standalaone net loss of Rs 1,036
crore for the fourth quarter of 2017-18 from a net profit of Rs 602.42
crore reported for the corresponding period of 2016-17.
In terms
of financial year, Jet Airways reported a standalone net loss of Rs
767.62 crore from a net profit of Rs 1,482.52 crore reported for the
previous fiscal.
On a consolidated basis, the aviation major
reported a net loss of Rs 636.45 crore in 2017-18 from a net profit of
Rs 1,498.68 crore in 2016-17.
Jet blamed its weak financial
performance on the rise in Brent fuel without a corresponding increase
in air fares, as well as mark-to-market adjustments due to a
depreciating rupee.
The airline had said that despite the
challenges imposed by the macroeconomic environment, "Jet Airways is on
track to deliver a more resilient enterprise on the back of certain key
initiatives... lowering cost of sales, increasing productivity, and fuel
savings driven by the fuel efficient B737 MAX aircraft."
|
|
|
|
|
|
|
|
|
|
|
|
|
Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
|
|
Daily Poll |
|
|
PM Modi's recent US visit to redefine India-US bilateral relations |
|
|
|
|
|
Commented Stories |
|
|
|
|
|
|
|
|