GMG Global’s shareholders must be scratching their heads over the group’s disappointing 1H14 results. The mainboard-listed firm registered a net loss attributable to shareholders of S$14.8 million in the first half of the year, on the back of continued weakness in the market price of natural rubber.
GMG’s average selling price per ton of natural rubber declined by as much as 38%, from S$3,604 per ton in 1H2013 to S$2,621 per ton in 1H2014. The Group registered revenue of S$442.8 million for 1H2014. This represents a year-on-year (“y-o-y”) decrease of 9.9%, compared to 1H2013.
The Group’s 35%-owned associate, SIAT SA, also incurred a loss in 1H2014 which largely contributed to the S$5.6 million share of associates’ loss recorded by the Group, as opposed to a gain of S$5.6 million in 1H2013.
Overall, in line with the profit guidance announcement released to SGX on 2 July 2014, the Group recorded a net loss attributable to shareholders of S$14.8 million in 1H2014.
According to Yao Xingliang, GMG’s Chief Executive Officer, “The natural rubber industry is cyclical and sensitive to the forces of demand and supply. Whilst demand remains stable, there has been a supply overhang in the market that has affected prices. However, we are in this business for the long term, and we are strongly positioned to ride out the current market volatility with our sound business model, healthy balance sheet and experienced management team.”