XMH Holdings, which sells engines used in ships, says its Indonesia subsidiary PT Xin Ming Hua Engine has been slapped with a tax bill of 143.9 billion rupiah by local tax authorities, or nearly $10.94 million.
For context, XMH's Holdings reported earnings of just over $25.5 million for its most recent FY2025 ended April.
In its announcement to the exchange on Sept 21, XMH Holdings says the tax is for its previous FY2024, and covers not only corporate income tax on PT XMH’s revenues from sales to customers in Indonesia, but also revenue generated by XMH's wholly-owned subsidiary in Singapore, Xin Ming Hua, from its direct sales to Indonesia-based customers, which have been attributed to PT XMH.
PT XMH, the Indonesian subsidiary facing this tax bill, is in the process of appointing local tax and legal advisors to explore "all available avenues to satisfactorily resolve the issue, including but not limited to, the filing of a formal objection against the tax assessment notice."
Just less than a week earlier, XMH announced it is booking a gain of $10 million from selling a 14.8% stake in a subsidiary Mech Power Generator to Mitsubishi Heavy Industries for $12.3 million.
XMH Holdings says it will "thoroughly review the basis of the tax assessment by the Indonesian authorities and will take the necessary steps to safeguard its interests."
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"However, should the full assessed amount be deemed payable, it would have a material financial impact on the group’s results for the current financial year," warns XMH Holdings.
XMH shares last traded at $1.77, up 149.3% year to date.
