GMG Global posts $48.2m loss in FY14 on back of lower rubber prices

Compared to a profit of $5.1m a year ago.

Mainboard-listed GMG Global sank into the red in FY14, posting a loss of $48.2m on back of the decline in the average selling price of natural rubber and share of loss of associate.

Share of associates’ results in FY2014 was a loss of S$3.6 million compared with a profit of S$0.8 million in FY2013. The decrease was mainly due to SIAT SA making a loss in FY2014 as a result of low rubber market prices and high operation costs in Gabon.

"The Group’s performance is highly dependent on the price of natural rubber which was averaging US$1,477 per ton (S$1,948 per ton) in December 2014 and the fluctuations of foreign currencies namely Euro, United States Dollars, Thai Baht and Indonesia Rupiah. Barring unforeseen circumstances, we expect rubber prices for 2015 to remain range-bound at current levels. The operating environment of GMG’s business remains challenging in view of the prevailing oversupply of natural rubber. Manpower cost are expected to continue to increase in the countries we operate, squeezing our profit margin in these markets," GMG stated in a release to the SGX.