Taiwanese-owned garment manufacturer Grand Twins International (GTI) blamed its second-quarter decline in profits, which fell by 45 per cent compared to the same financial period last year, on the rising cost of labour and raw material imports.

The company’s announcement came a day after issuing its half-year and second-quarter financial reports, which showed revenue increased to $42 million during the first six months of the year, compared to $29 million during the same period in 2015, while profits fell to $3.6 million, from $4.3 million a year earlier.

However, during the second quarter of 2016 the company’s profits plunged to $2 million, from $3.6 million a year earlier, despite an additional $10 million in revenue.

The unaudited financial filing showed the majority of revenue was eaten up in a massive increase in cost of sales, a formula that combines labour, materials and overhead costs, which climbed from $8.5 million during the second quarter of 2015 to $23 million this year.

Henry Chan, GTI’s chief financial officer, told the Post yesterday that he expects revenue to continue to grow with the successful completion of expansions bankrolled by the $20 million the company raised during its initial public offering in 2014.

“As soon as GTI got the money from the public listing in 2014, we started our expansion plan to increase orders,” he said.

“The plan was completed last year and we can see the effects on our revenue.”

Chan did not address why the company’s second quarter profits were so low compared to revenue.

GTI has not released a growth forecast for the rest of this year. However, the company rounded out last year with a little over $1 million in profit.

GTI is owned by QMI Industrial Co Ltd, a British Virgin Islands-registered holding company. Its stock price rallied moderately yesterday, increasing by 4.85 per cent and closing the day at 3,460 riel ($0.84).