GMG nine-month net profit crashed 55.7% to $15.7m

Revenue recedes 14.3% for same period.

Mainboard-listed GMG Global Limited (GMG), a vertically-integrated producer of natural rubber engaged in the planting, growing, tapping, processing and marketing of natural rubber, today announced a net profit attributable to shareholders of S$15.7 million for the nine months ended 30 September 2013 (9M 2013).

Revenue for the same period was S$737.9 million, achieved on the back of selling price of natural rubber averaging $3,429 per ton. This is approximately 19% lower than the $4,232 per ton recorded for the same period in 2012 (9M 2012).

However, the downside impact of natural rubber prices on the Group’s revenue was partly mitigated by an increase in sales tonnage, which grew from 203,403 tons in 9M 2012 to 215,181 tons in 9M 2013.

“Prices of rubber are at its lowest since 2010, and we believe that current levels provide the base for continued rubber production, below which it will not make economic sense. As such, we believe that the worst may be over for the industry, and we should see an impending global recovery,” said Mr Yao Xingliang, GMG’s Chief Executive Officer.

Year to date, contribution from associates, mainly SIAT SA, grew 131% to S$8.2 million. SIAT SA, which owns and invests in natural rubber and palm oil businesses in Cote d’Ivoire, Ghana, Nigeria and Gabon, continued to focus on own plantation investments in African countries.

As at 30 Sept 2013, the Group said it maintained a strong balance sheet with total cash and cash equivalents standing at S$106.3 million, a low gearing ratio of 0.16, and net asset value per share of 10.72 cents.

For its business outlook, GMG said the financial performance of the Group is highly dependent on the market prices of natural rubber. Volatility of international currencies as well as political situations in countries where the Group operates will also have a direct impact on its operating costs and profitability. Barring adverse global developments, the Group expects natural rubber market prices to hover around US$2,300 per ton for the rest of 2013.

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