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

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • Angkor photo rules clarified

    The Apsara National Authority (ANA) denied that it had banned the use of camera tripods in the Angkor Archaeological Park, explaining that the confusion stemmed from a long-standing rule which required commercial photographers and videographers to apply for permission to film. The explanation followed a

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At

  • Nestle’s debut may spur dairy market

    Leading confectionery manufacturer Nestle plans to invest in Cambodia by setting up an operation in the near future, a move majorly hailed by local dairy farmers as a means of boosting the fresh milk market in the Kingdom. During a visit by a delegation led