GLG CORP LTD — Interim / Quarterly Report 2019

Feb 21, 2019

GLGCorpLtd

ACN116632958 ResultsforAnnouncementtotheMarket Appendix4D–HalfYearReport GiventoASXunderListingRule4,2A

CurrentReportingPeriod-HalfYearEnded31[st] December2018 PreviousReportingPeriod-HalfYearEnded31[st] December2017

• 1.HighlightofResults

• 2.Appendix4DFinancialStatementsfortheHalfYear ended31December2018

1.Resultsforannouncementtomarket

Summaryfinancialinformationforthecompanyforthesixmonthsended31[st] December2018.Fullfinancialdetailsareattachedtothisannouncement.

		Consolidated	Consolidated
SummaryInformation	31–DEC-18USD$’000	31–DEC-17USD$’000	Inc/(Dec)USD$’000	Inc/(Dec)%
RevenuefromOrdinaryActivities	89,499	88,679	820	0.9%
Profit/(Loss)afterTaxfromOrdinaryActivities	1,409	1,854	(445)	(24%)
NetProfit/(Loss)afterTaxAttributabletoMembers	1,409	1,854	(445)	(24%)
BasicEarnings–USCentsPerShare	1.90	2.50	(0.60)	(24%)
DilutedEarnings–USCentsPerShare	1.90	2.50	(0.60)	(24%)
NetTangibleAssets–USCentsPerShare	67.34	64.43	2.91	4.5%

Summarycommentaryonresults

DirectorsComments:

GLG’stop-linerevenueincreasedby0.9%from US$88,679thousandtoUS$89,499 thousandforthefirsthalfofthisfinancialperiodended31December2018.Thisis duetoincreaseinbusinesswithexistingcustomer(from goodexecution)and businessvolumerampfrom new customerrecentlywoninthepreviousfinancial year.

Grossmarginimprovedby9%from US$13,069thousandtoUS$14,375thousandfor thefirsthalfofFY2018comparedwithayearago,duetoincreasedfabricmarginand bettergarmentproductmixdespiteyarnpriceincrease.Thegarmentproductmix marginissupportedbytheLandedDutyPaidbusinesswherethefreightand customsdutycostsarecategorisedunderSellingandDistributioncosts,asopposed toCostofSales.

Sellinganddistributioncostsincreasedby31%toUS$4,077thousandcomparedto US$3,113thousandinthepreviousperiod2017,mainlyduetotheincurrenceof airfreightcostbygarmentfactoryinCambodiaandMaxim fabricmilltomeetthe tightdeliverydatesrequiredfromcustomers.

Administration expense increased by26% to US$6,984 thousand compared to US$5,537thousandinthepreviousperiod2017.Thisisattributabletoanincreasein adminheadcountinHQ coupledwithanincreaseincostsfrom consolidationof garmentfactoryinCambodia.

Financecostsincreasedby82%from US$892thousandtoUS$1,624thousandinthe firsthalfof2019comparedwiththecorrespondingperiodinthepreviousyear,dueto the increase in purchase ofraw materials to supporthighersales and new machineriesinvestmentinthefactories.

Otherexpensesdecreasedby79%fromUS$1,514thousandtoUS$320thousanddue tocostsavingsinavoidingcommitmentfeespayabletooutsourcedmanufacturers infirsthalfofFY2019.

NetprofitaftertaxforGLGforthehalfyearended31December2018wasUS$1,409 thousand,whichrepresentsdecreaseofUS$445thousandor24%comparedtothe corresponding period lastyearofUS$1,854 thousand.Overall,thedecreasein profitabilityisduetoproductionlossesincurredinVietnam andCambodiagarment factories.

DirectorsComments:(cont’d)

BalanceSheetposition

Inventoryincreasedbyabout20%toUS$23,455thousandasat31December2018 comparedtoUS$19,480thousandasat30June2018,duetoanincreaseinthe inventoryofrawmaterialsandwork-in-processintheMaxim fabricmilltosupport theupcomingordersfrom customersandincreaseinyarnprice.Correspondingly, thishasalsoresultedintheincreaseinTradeandOthersPayableincreaseby18%to US$43,881thousandasat31December2018comparedtoUS$37,249thousandas at30June2018.

Property,plantandequipmentincreasedmarginallyby2%toUS$41,026thousandas at31December2018comparedtoUS$40,138thousandasat30June2018,dueto costofinvestmentinnewmachineryfortheCambodiagarmentfactoryandMaxim fabricmill.

Currentandnon-currentborrowingsdecreasedby10%from US$80,276thousandas at30June2018toUS$71,907thousandasat31December2018,asaresultof decreaseinexportinvoicefactoringfrom financialinstitutionsandrepaymentof bankloanswhichcorrespondinglyreducedthecashbalanceof55%from US$8,183 thousandasat30June2018toUS$3,684thousandasat31December2018.

CashFlow

Overall,GLG’scashfrom operatingactivitiesincreasedtoUS$8,243thousandforthe halfyearended 31 December2018 compared to US$3,260 thousand forthe correspondingperiodended31December2017.Thisincreaseoccurreddueto increaseinsalesandthepromptsettlementfrom customers,supportedbyclose monitoringoftradereceivables. Webelievethecashflow from operationsofGLGremainssufficienttomeetour workingcapitalrequirements,capitalexpenditures,debtservicingandotherfunding requirements.

Auditqualificationorreview

Thefinancialstatementsweresubjecttoareview bytheauditorsandthereview reportisattachedaspartoftheinterimreport.