Logo of Phnom Penh Post newspaper Phnom Penh Post - Cost cutting leads to Q1 profit for GTI

Cost cutting leads to Q1 profit for GTI

Cost cutting leads to Q1 profit for GTI

Publicly-listed garments firm Grand Twins International made a small profit this quarter by slashing its costs, although that didn’t stop the company from taking a hit to its revenues, according to its first-quarter results released yesterday.

First-quarter revenues for GTI, one of the two companies listed on Cambodia’s stock exchange, dropped 7.5 per cent – or $1.2 million – compared to the most recent quarter at the end of last year, clocking in at $14.7 million.

However, GTI managed to turn a net profit of over $628,000 – compared to a loss of $913,000 last quarter – largely thanks to an almost 30 per cent slash in its materials costs.

Ken Loo, secretary general at the Garment Manufacturers Association of Cambodia, said that despite some firms “clawing back” profits by cutting expenses, Cambodia’s garment industry was struggling to compete due to the minimum wage increase to $128 which went into effect at the start of this year.

“I don’t see how any factories can be in any better position,” he said.

Loo said that garment factories had been left to absorb the wage increase without corresponding decreases in logistics, transport or energy outlays.

“And I certainly don’t think productivity has jumped 28 per cent overnight,” he added.

GTI’s stock price declined almost 5 per cent yesterday to 5,760 riel or $1.41 a share.

The stock is down a full dollar from its initial listing price of $2.41 last June.

Earnings per share stood at 63 riel, or 1.5 cents.

Svay Hay, president and CEO of Acleda Securities brokerage firm, said GTI’s profit increase was nevertheless a good signal for investors.

“The periodic increase will contribute to the year-end profit, so it’s a good sign for stockholders, especially income-approach investors who invest more at the upward trend,” he wrote in an email.

Hay added that he expected the stock exchange to perform better as more companies tentatively list this year and in 2016.

GTI’s revenue declined less than the previous two quarters.

For the third and fourth quarter of 2014, the firm’s earnings decreased 40 per cent and 28 per cent, respectively.

MOST VIEWED

  • New US bill ‘is a violation of Cambodian independence’

    After a US congressmen introduced bipartisan legislation that will enact sanctions on Cambodian officials responsible for “undermining democracy” in the Kingdom, government officials and the ruling Cambodian People’s Party on Sunday said they regarded the potential action as the “violation of independence and sovereignty

  • Angkor Wat named as the top landmark for the second year

    Travel website TripAdvisor has named Cambodia’s ancient wonder Angkor Wat as the top landmark in the world for the second year running in their Travelers’ Choice Award 2018, an achievement Cambodian tourism operators expect will attract more tourists to the Kingdom. The website uses traveller

  • Ministry’s plan for net sparks fears

    The government has ordered all domestic and international internet traffic in the Kingdom to pass through a Data Management Centre (DMC) that has been newly created by the state-owned Telecom Cambodia, in a move some have claimed is an attempt to censor government critics. Spokesman

  • Hun Sen detractors ‘will die’

    Prime Minister Hun Sen on Wednesday said those who curse or insult him would eventually die without a plot of land to bury their bodies after being killed by lightning, suffering the same fate as those who recently died in Thmar Baing district in Koh