The Straits Times / The Business Times News on GMG

GMG Global posts 18-month net gain of $1.4m on higher sales Sept 08, 2000 The Business Times GMG Global, a rubber plantation owner in West Africa, yesterday posted net profits of $1.4 million for the 18 months to June 30, on higher sales and lower operating costs. Sesdaq-listed GMG changed its financial year-end to June 30 from Dec 31 to coincide with the financial year-end of the group's major subsidiaries in Cameroon. As required, comparisons were prepared based on the 12-month period from July 1, 1998, to June 30, 1999. The group suffered a loss of $2.1 million for the 12-month 1998/1999 period. GMG Global, which took over Electronic Magnetics last year, said sales of its rubber products notched $74.9 million for the 18 months, but was $48.9 million for the 12-month period (1998/1999). Earnings per share was 0.07 cent, against a loss of 0.10 cent. Net tangible asset backing per share was 7.83 cents against 6.73 cents. In reviewing the results, GMG Global compared the 12-month period ended June 30, 2000, with the corresponding year-ago period, and said sales rose 7.5 per cent to $52.6 million. The quantity of natural rubber sold declined 10.8 per cent from about 47,000 tons to 42,000 tons. But a 20 per cent increase in 1999/2000 average selling prices from 1998/1999 prices resulted in an overall increase in sales value, it said. GMG explained that the reduced quantity sold was deliberate so that it could curtail tapping in the wet months and conserve bark in view of the still weak rubber prices. On future prospects, with world rubber prices at a 30-year low in the past three years as a result of the economic crisis in Asia, GMG said as economic sentiments improved in the region, any pick-up in demand as well as a supply curtailment by key Asian producers would boost rubber prices. GMG also gave an update on the purchase of a loan which will result in an exceptional gain of about 84 million francs (equivalent to S$20 million). The company said the exceptional gain is likely to be recognised in the financial year ending June 30, 2001, upon the redemption of the loan.