GMG Global

GMG Global: 1H14 saw a net loss of $14.8m (1H13 net profit: 14.1m) while revenue fell 9.9% to $442.8m on the sharp decline of natural rubber ASP (1H14: -27.3% to $2,621/ton). Bottom line was further weighed by share of loss of associates of $5.6m (1H13 share of profit: $5.6m), on low rubber market prices and forex loss. 2H14 outlook will be underpinned by rubber market prices, currency fluctuations and wage costs. On rubber market prices, management expects fluctuations around current prices, barring unforeseen circumstances. On the wage front, on-going minimum wage negotiations in Africa and Indonesia might potentially dilute profit margins in said markets. GMG trades at P/B of 0.9x.