The Straits Times / The Business Times News on GMG

GMG Global posts $21.2m H1 net Feb 15, 2003 The Business Times $22.3m exceptional gain from revamp of long-term Cameroon debt boosts earnings RUBBER plantation owner GMG Global bounced back into the black for the six months ended December with net earnings of $21.2 million. GMG's earnings have been on a yo-yo. In FY2002, for example, it posted a full-year net loss $13.6 million, after a net gain of $1.6 million the year before. While the swing back to the black at half time may be good news, GMG's net working capital deficit swelled from $12.1 million at June 30, 2002, to $17 million at the end of December. GMG said it has reviewed cashflow projections and believes it can continue to operate as a going concern. Interim profit was inflated by an exceptional gain of $22.3 million that helped stretch the net gain to $21.2 million. The exceptional gain resulted from the restructuring of a long-term debt with the state of Cameroon. The reduction in the loan, less the related restructuring and consulting fee, resulted in the $22.3 million gain. GMG owns rubber plantations in West Africa. As the exceptional gain is likely to be one-off, GMG's strong net profit showing may not be repeated, save for a dramatic improvement in operations. Pre-tax profit came in at $2.6 million compared with a loss of $2.1 million previously. A rise in the price of natural rubber provided the buoyancy for GMG's 28.8 per cent rise in turnover to $35.7 million for the six months ended December. Earnings per share stood at 1.05 cents against loss per share of 0.17 cents previously. Net tangible assets per share improved to 8.78 cents from 7.66 cents. Gross margin was up by 8 per cent. GMG is controlled by Indonesian-born Joseph Gondobintoro and his family. The Gondobintoros rode in as a white knight for debt-ridden Electro Magnetics Ltd in 1999. EML, which made videotapes, was taken over by GMG and its shares were delisted. Looking ahead, GMG said its operations could be affected by the El Nino effect. The wintering season in the second half year could also affect rubber production. GMG ended half a cent up at 2.5 US cents yesterday.