Auditor-General says RM49.88m accumulated losses weighing down Felda-owned Grand Borneo in 2020, partly due to pandemic
PUTRAJAYA, Feb 16 — Grand Borneo Sdn. Bhd., which was set up to run Felda’s hotels and resorts in the country, accumulated RM49.88 million in losses in 2020 – in part due to the Covid-19 pandemic.
This finding was disclosed in the 2021 Auditor-General’s Report Series 2 released today.
The national audit report found that one hotel and six resorts managed by Grand Borneo – Felda Residence Sahabat, Felda Residence Hot Springs, Felda Residence Kuala Terengganu, Felda Residence Kuala Terengganu, Felda Residence Tekam and Felda Residence Tanjung Leman as well as Grand Borneo Hotel Kota Kinabalu — recorded 42.9 and 67.5 percent room occupancy rates in 2020 and 2021 respectively.
Its revenue for the two pandemic years fell short of the original targets, coming in at 32.4 per cent and 74.1 per cent respectively.
“Overall, the objective of establishing Grand Borneo to manage FR Group Resorts has not been fully achieved, corporate governance practices are less than satisfactory and the financial position is less stable.
“Grand Borneo has also not yet been able to generate profit for the period from 2019 to 2020. This is due to factors beyond Grand Borneo’s control following the effects of the Covid-19 pandemic and the Movement Control Order in 2020 which has affected the management of planned activities,” the A-G said in the report.
The A-G also noted that Grand Borneo had less satisfactory governance.
As of July 2022, the funds required for the purpose of refurbishing the FR Group resort amounting to RM4.09 million have not yet been obtained from FELDA.
However, the Audit review of the Debtor Aging Report found that as of 30th June 2022, a total of RM672,548 in debt has not been paid by Grand Borneo customers
Audit analysis found that debtors in arrears exceeding 30 days amounted to RM351,800 (52.3 per cent) while the total amount of debts exceeding 120 days amounted to RM225,626 (33.5 per cent).
The A-G recommended that Grand Borneo needs to aggressively promote and market its resorts and use the money it has been budgeted to do so.
“Efforts to attract more visitors need to be improved by taking into account the attractions or tourism products of local people around the resort,” the A-G said in the report.
It also recommended the company seek more funds from Felda for the upkeep of its facilities and equipment.
“The maintenance, replacement and repair of damaged assets must be carried out immediately so that accommodation rooms and facilities can be used optimally to increase the company’s income and provide comfort to visitors,” the A-G said.
