Logo of Phnom Penh Post newspaper Phnom Penh Post - GTI pins fall in Q2 profits on rising costs

GTI pins fall in Q2 profits on rising costs

An employee of Grand Twins International cleans and irons items of apparel in Phnom Penh’s Sen Sok district in 2014.
An employee of Grand Twins International cleans and irons items of apparel in Phnom Penh’s Sen Sok district in 2014. Vireak Mai

GTI pins fall in Q2 profits on rising costs

Taiwanese-owned garment manufacturer Grand Twins International (GTI) blamed its second-quarter decline in profits, which fell by 45 per cent compared to the same financial period last year, on the rising cost of labour and raw material imports.

The company’s announcement came a day after issuing its half-year and second-quarter financial reports, which showed revenue increased to $42 million during the first six months of the year, compared to $29 million during the same period in 2015, while profits fell to $3.6 million, from $4.3 million a year earlier.

However, during the second quarter of 2016 the company’s profits plunged to $2 million, from $3.6 million a year earlier, despite an additional $10 million in revenue.

The unaudited financial filing showed the majority of revenue was eaten up in a massive increase in cost of sales, a formula that combines labour, materials and overhead costs, which climbed from $8.5 million during the second quarter of 2015 to $23 million this year.

Henry Chan, GTI’s chief financial officer, told the Post yesterday that he expects revenue to continue to grow with the successful completion of expansions bankrolled by the $20 million the company raised during its initial public offering in 2014.

“As soon as GTI got the money from the public listing in 2014, we started our expansion plan to increase orders,” he said.

“The plan was completed last year and we can see the effects on our revenue.”

Chan did not address why the company’s second quarter profits were so low compared to revenue.

GTI has not released a growth forecast for the rest of this year. However, the company rounded out last year with a little over $1 million in profit.

GTI is owned by QMI Industrial Co Ltd, a British Virgin Islands-registered holding company. Its stock price rallied moderately yesterday, increasing by 4.85 per cent and closing the day at 3,460 riel ($0.84).

MOST VIEWED

  • Omicron patients can stay home: PM

    The Ministry of Health has issued a directive on the treatment of people who have tested positive for the highly transmissible Omicron coronavirus variant, following a suggestion from Prime Minister Hun Sen on the night of January 21. The directive permits home quarantine for those who

  • The effects of the USD interest rate hike on Cambodian economy

    Experts weigh in on the effect of a potential interest rate expansion by the US Federal Reserve on a highly dollarised Cambodia Anticipation of the US Federal Reserve’s interest rate hike in March is putting developing economies on edge, a recent blog post by

  • Cambodia’s first ever anime festival kicks off Jan 22 at capital’s F3 centre

    Phnom Penh's first ever Anime Festival will bring together fans, artists, shops and other local businesses with ties to the Japanese animation style for cosplay competitions, online games, pop-up shops and more on January 22, with Friends Futures Factory (F3) hosting. F3 is a project that

  • Hun Sen gets 4th Covid shot, urges compatriots to follow

    Prime Minister Hun Sen and his wife Bun Rany on January 14 received their fourth dose of Covid-19 vaccine and called on compatriots to follow suit as the Omicron coronavirus variant continues to spread in the community. This marks the launch of Cambodia's fourth-dose vaccination campaign,

  • Fourth dose Covid booster drive jabs 43K in two days

    In the first two days of the fourth-dose Covid-19 vaccination campaign, more than 43,000 people volunteered to get the jabs, while over 4.6 million people have received a third shot. Health ministry spokeswoman Or Vandine said that fourth-dose vaccinations, which began on January 14 exclusively with the Pfizer

  • Singapore backs Cambodia's efforts on Myanmar

    Singaporean Prime Minister Lee Hsien Loong supports Cambodia in its efforts to seek a solution to the ongoing Myanmar crisis as the chair of ASEAN. Lee expressed his support during a meeting with Prime Minister Hun Sen via videoconference on January 14, with the talks focused