GLG CORP LTD — Interim / Quarterly Report 2011

Feb 27, 2011

GLG Corp Ltd

ACN 116 632 958 Results for Announcement to the Market Appendix 4D – Half Year Report given to ASX under Listing Rule 4.2A

Current Reporting Period - Half Year Ended 31[st] December 2010 Previous Reporting Period - Half Year Ended 31[st] December 2009

1. Highlight of Results

2. Appendix 4D Financial Statements for the Half Year ended 31 December 2010

1. Results for announcement to market

Summary financial information for the company for the six months ended 31[st] December 2010. Full financial details are attached to this announcement.

		Consolidated
Summary Information	31 –Dec-10 USD$’000	31 –Dec-09 USD$’000	Inc/(Dec) USD$’000	Inc/(Dec) %
Revenue from Ordinary Activities	113,497	97,206	16,291	16.8%
Profit/(Loss) after Tax from Ordinary Activities	1,298	5,406	(4,108)	(75.9%)
Profit/(Loss) after Tax from Discontinued Activities	-	-	-	-
Net Profit/(Loss) after Tax Attributable to Members	1,298	5,406	(4,108)	(75.9%)
Basic Earnings – US Cents Per Share	1.75	7.30	5.55	(75.9%)
Dilute Earnings – US Cents Per Share	1.75	7.30	5.55	(75.9%)
Net Tangible Assets – US Cents Per Share	49.08	47.33	1.75	3.69%

Dividends (Distributions)	As per security – US Cents	Franked amount per security-US cents
Dividends Paid during Year	Nil	Nil
Proposed Final Dividend	Nil	Nil
Proposed payment date for final dividend	N/A	N/A

Summary commentary on results

Directors Comments:

GLG Corp Ltd’s (“GLG”) net profit decreased by US$4,108 thousand to US$1,298 thousand, against a net profit of US$5,406 thousand for the corresponding period in 2009. The decrease was mainly due to a “one-off” write back of impairment charge of US$2,500 thousand in 2009, surging commodities prices resulting in lower gross margins, rising oil and transport costs and higher distribution, administrative, finance and other expenses.

GLG’s sales increased by US$16,291 thousand, or 16.8% to US$113,497 thousand compared to sales of US$97,206 thousand in the corresponding period of 2009. The increase in sales was due to higher orders from customers and Yarn Sales.

Other income increased by US$312 thousand to US$1,330 thousand due to higher suppliers’ commission received.

Cost of sales increased by US$16,157 thousand, or 18.2%, to US$104,983 compared to cost of sales of US$88,826 thousand for the corresponding period of 2009. The increase was consistent with the increase in sales.

GLG’s gross profit was US$8,514 thousand compared to a gross profit of US$8,380 thousand for the corresponding period of 2009. Despite the higher gross profits, gross margin declined from 8.6% to 7.5%, this is because of surging of cotton and yarn prices were unable to fully pass on to the consumer in the pricing of garments made as United Stated consumer confidence is yet to rebound.

Distribution expenses increased by US$157 thousand, or 26%, to US$762 thousand compared to distribution expenses of US$605 thousand for the corresponding period of 2009 due to higher design fee paid.

Administrative expenses increased by US$1,394 thousand, or 30.3% to US$5,992 thousand compared to US$4,598 thousand for the corresponding period of 2009. This is because trading conditions have been improved and to prevent the disruption of the business operations, the Company has reinstated salaries and wages to pre-global crisis levels in order to avoid high staff turnover and increase in the headcount to cope with the increased sales.

Other expenses increased by US$417 or 178.2% to US$651 thousand compared to US$234 thousand for the corresponding period of 2009. This is because of weakening of US dollar resulted in higher exchange losses.

Finance costs were increased to US$852 thousand or 105.8% compared to US$414 thousand for the corresponding period of 2009. The increase was due to higher export financing cost resulting from higher revenue.

GLG Corp Ltd’s (“GLG”) net profit decreased by US$4,108 thousand to US$1,298 thousand, against a net profit of US$5,406 thousand for the corresponding period in 2009. The decrease was mainly due to a “one-off” write back of impairment charge of US$2,500 thousand in 2009, surging commodities prices resulting in lower gross margins, rising oil and transport costs and higher distribution, administrative, finance and other expenses.

GLG’s sales increased by US$16,291 thousand, or 16.8% to US$113,497 thousand compared to sales of US$97,206 thousand in the corresponding period of 2009. The increase in sales was due to higher orders from customers and Yarn Sales.

Other income increased by US$312 thousand to US$1,330 thousand due to higher suppliers’ commission received.

Cost of sales increased by US$16,157 thousand, or 18.2%, to US$104,983 compared to cost of sales of US$88,826 thousand for the corresponding period of 2009. The increase was consistent with the increase in sales.

GLG’s gross profit was US$8,514 thousand compared to a gross profit of US$8,380 thousand for the corresponding period of 2009. Despite the higher gross profits, gross margin declined from 8.6% to 7.5%, this is because of surging of cotton and yarn prices were unable to fully pass on to the consumer in the pricing of garments made as United Stated consumer confidence is yet to rebound.

Distribution expenses increased by US$157 thousand, or 26%, to US$762 thousand compared to distribution expenses of US$605 thousand for the corresponding period of 2009 due to higher design fee paid.

Administrative expenses increased by US$1,394 thousand, or 30.3% to US$5,992 thousand compared to US$4,598 thousand for the corresponding period of 2009. This is because trading conditions have been improved and to prevent the disruption of the business operations, the Company has reinstated salaries and wages to pre-global crisis levels in order to avoid high staff turnover and increase in the headcount to cope with the increased sales.

Other expenses increased by US$417 or 178.2% to US$651 thousand compared to US$234 thousand for the corresponding period of 2009. This is because of weakening of US dollar resulted in higher exchange losses.

Finance costs were increased to US$852 thousand or 105.8% compared to US$414 thousand for the corresponding period of 2009. The increase was due to higher export financing cost resulting from higher revenue.

The discussion that follows compares the condensed consolidated statement of financial position as at 31 December 2010 with that of 30 June 2010.

Cash as at 31 December 2010 increased by US$4,133 thousand, or 203.5%, to US$6,164 thousand compared to US$2,031 thousand as at 30 June 2010 due to timing of receipts, payments and financing.

Trade and other receivables increased by US$2,522 thousand, or 11.1%, to US$25,440 thousand as at 31 December 2010 compared to US$22,819 thousand as at 30 June 2010 because of higher shipments to customers prior to the half year end.

Borrowings decreased by US$253 thousand, or 8.2%, to US$2,833 thousand as at 31 December 2010 compared to US$3,086 thousand as at 30 June 2010 due to repayment of loan and finance lease.

Equity increased to US$36,375 thousand as at 31 December 2010, from US$35,077 thousand as at 30 June 2010, from the increase in retained profits as at 31 December 2010.

The discussion that follows compares the consolidated statement of cash flows for the six months to 31 December 2010 with that of 31 December 2009.

GLG’s cash from operating activities improved to an inflow of US$136 thousand for the half year ended 31 December 2010 compared to an outflow of US$3,846 thousand for the half year ended 31 December 2009. The increase in the cash flow from operating activities was mainly due to higher revenue resulting higher receipts from customers.

We believe the cash flow from operations of GLG remains sufficient to meet our working capital requirements, capital expenditures, debt servicing and other funding requirements for the foreseeable future.