Grand Twins International (GTI), one of two listed firms on the Cambodian Stock Exchange, has blamed third-quarter revenue losses on garment-worker demonstrations in December and January.

On November 21, GTI posted a 40 per cent decline in revenue to $10.9 million for the three-month period ending September 30. The poor third-quarter performance contributed to an 8 per cent fall in revenue over the first nine months of 2014.

“Due to the mass strike last year, our customer has re-allocated some productions to different [parts of the] region to assure the stability of the supply,” Stanely Shen, spokesman for GTI said yesterday.

“Although GTI continued the daily operations without being affected [by the strikes], our customers took the necessary precautions by reallocating orders to avoid shortages that might have been caused in the future.… This order reallocation has caused our revenue to decrease dramatically,” he said.

Exports declined across Cambodia’s garment sector during the third quarter after buyers reduced orders in the first six months of the year following nationwide garment-worker strikes in January.

Garment exports totalled $1.61 billion during the third quarter, down 4 per cent from $1.68 billion in the same period last year, Ministry of Commerce data show.

However, while GTI’s revenues declined between July and September, profits reportedly increased 42 per cent to more than $2.4 million, according to the unaudited financial results.

However, the statement also shows GTI paid just $700,000 in taxes over the first nine months of this year, 50 per cent less than the $1.4 million allegedly paid during the same period in 2013.

Shen said that the discrepancy in expenses was caused by GTI averaging out its 2013 full-year tax bill into quarters instead of basing it more accurately on Cambodia's 20 per cent tax on all company profits.

“This profit increase is mostly due to the huge decrease in tax expense,” Shen explained.

“As we did not release a quarterly report last year, the [2013] tax expense uses the weighted average method, which does not exactly reflect the real tax expense as dated. This is the reason that caused this revenue and profit contradiction,” Shen said.

Soleil Lamun, deputy director of market operations at the CSX validated the company’s filing and said GTI’s unaudited financial statement was accurate and reliable, but did lack detail on the tax discrepancy.

“But the issue here for investors might be the non-explanation of the cause of difference of tax on profit between the two periods,” he said.

GTI shares were trading at $1.90 at yesterday’s close, down from the company’s June 16 IPO price of $2.41 per share.