After posting an overall decline in profit of 70 per cent in 2015, Grand Twins International (GTI), the only publicly traded garment firm, reported bullish earnings for the first quarter of this year signalling hope that the manufacturer could launch a winning streak.
In a quarterly report released yesterday, the Taiwanese-owned garment manufacturer showed that net profits soared by 157 per cent to $1.6 million, up from $628,000 during the same time last year.
The firm’s profits skyrocketed as revenues for the period of January to March climbed by nearly 15 per cent from $14.7 million to $17 million.
The company did not respond to requests for comment yesterday.
However, its unaudited financial report showed that costs of sales – a breakdown of labour, materials and overhead – enlarged slightly by $1.5 million for the quarter. The company reduced its costs for administrative fees, and the report showed that distribution costs fell by $70,000.
While the garment manufacturer was poised for a similar growth path last year, it was reported in April that the firm had inadvertently carried over an accounting error that skewed its actual 2015 earnings. The error wasn’t caught until the end of financial year after it released an audited financial statement.
The company rounded out last year with only a little over $1 million in profit, down by $3.4 million in 2014.
Soleil Lamun, deputy director of market operations at the Cambodian Securities Exchange (CSX), could not validate the company’s disclosure as accurate, saying that it was up to the auditors to verify the company’s accounting practices.
“The CSX is just the one that gets the report for publication. We don’t ask any questions, we just disclose.”
Asked if he thought that GTI’s could show sustained growth this year, he said that it was too early to tell as this was just the first filing of 2016.
“I don’t know if the garment business is something that is as stable as something like the water supply company,” he said.
“[The increase] in profits could be attributed to orders carried over from last year and which can’t be recorded as revenue until they are completed and delivered.”
GTI is owned by QMI Industrial Co Ltd, a British Virgin Islands-registered holding company, and primarily manufactures products for German sportswear giant Adidas.
The firms share price on the Cambodian Securities Exchange rallied yesterday and increased by 4 per cent. The shares price closed at 3,900 riel ($0.96) up from 3,720 riel ($0.91).
The firm’s earning per share increased to $0.04 for the first quarter, compared to the $0.02 per share compared to the same time last year, according to the filing.