DEAR SHAREHOLDERS

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On behalf of the Board of Directors, we hereby present the Annual Report of KTMG Limited (“KTMG” or the “Company”, and together with its subsidiaries, the (“Group”) for the financial year ended 31 December 2025 (“FY2025”).

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In 2025, we operated in a complex and uncertain global environment, shaped by ongoing geopolitical conflicts, escalating trade tensions, and heightened trade policy uncertainties, which weighed on the global apparel manufacturing industry. Consumer sentiment in our principal markets, particularly the United States (“US”), Europe, and the United Kingdom (“UK”), softened during the year, affecting demand visibility and customer ordering patterns, while uncertainties over tariffs further contributed to less predictable demand. These headwinds contributed to market volatility and cost pressures across the apparel supply chain, resulting in a challenging operating environment for the Group. Nevertheless, we remained resilient and demonstrated operational agility in navigating this period of uncertainty.

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Amid the challenging environment, the Group recorded a net loss attributable to shareholders of S$3.5 million for FY2025, narrowing from a loss of S$5.7 million in the previous year. Revenue fell by 44.1% to S$58.4 million in FY2025, primarily due to lower apparel orders and reduced revenue contributions from key markets in the US, UK, and Japan, which declined by S$28.6 million, S$8.2 million, and S$8.0 million, respectively. In addition, a Cambodian subsidiary accepted orders where raw materials (fabric, accessories, and embellishments) were supplied directly by the customer, resulting in lower billings.

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Gross profit decreased by 36.5% to S$4.7 million in FY2025, in line with the decline in revenue. However, gross profit margin improved by 1.0 percentage point to 8.1% in FY2025, from 7.1% in FY2024. The margin improvement was achieved despite higher labour and production costs incurred to expedite certain orders for US customers ahead of the implementation of the 19% reciprocal tariff on Cambodian-manufactured products, effective 1 August 2025, following the expiry of the tariff pause period. The accelerated fulfilment, consequently, led to lower utilisation and reduced operational efficiency across the Group’s manufacturing plants in subsequent months.

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During the year, we took proactive measures to manage production and supply chain challenges. This included optimising production schedules, implementing targeted cost-control initiatives, and adapting operations in our Cambodian subsidiary to fulfil orders where raw materials were supplied directly by customers. We also worked closely with key customers to accommodate changes in ordering behaviour, including expediting shipments and tailoring production and delivery schedules to meet changing customer requirements and ensure consistent service.

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Through disciplined operational management and prudent cost control, the Group navigated a challenging year, maintaining resilience and reinforcing its foundation to support sustainable performance.

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MOVING FORWARD WITH CLARITY

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The global apparel manufacturing landscape remains challenging amid ongoing geopolitical developments and trade policy uncertainties, which continue to affect consumer sentiment, sourcing decisions, and input prices for our products. The recent US Supreme Court ruling that the US Administration’s use of the International Emergency Economic Powers Act to impose duties was illegal adds further uncertainty as the US Administration is expected to review and rebuild its tariff regime with potential sectoral and economy specific measures. Against this backdrop, we anticipate industry conditions to remain competitive and uncertain in the near term, particularly in our principal markets of the US, Europe, and the UK, where discretionary spending continues to be affected by inflationary and macroeconomic concerns.

Cost pressures are expected to persist across the industry due to intensified competition amid softened demand and extreme volatility in fuel prices, which affect input costs for our products, as well as utilities and logistics costs. In response, we will prioritise disciplined order acceptance, productivity improvements, and tighter cost controls. Key initiatives include more efficient manpower deployment and optimised production planning, supported by the use of AI tools across the Group, to manage costs and enhance operational efficiency.

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Looking ahead, we have established short, medium, and long-term strategies to reinforce our foundation and strengthen resilience to support sustainable performance. In the short term, we will focus on optimising our apparel manufacturing operations in Cambodia and improving capacity utilisation in our textile manufacturing business. This will be achieved through strategic collaborations with partner manufacturers, aimed at enhancing materials sourcing, leveraging partners’ customer networks for marketing, and combining production capacities where required to secure larger orders. These collaborations also provide additional safeguards against potential production disruptions, ensuring continuity and reliability for our customers.

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Over the medium term, our focus will be on enhancing operations by prioritising higher value-added activities. This includes pre-production initiatives such as research and design, as well as post-production activities, such as distribution, targeting growth markets in the US, Canada, and Southeast Asia. By redeploying resources into these areas, we aim to position the Group to achieve our long-term vision.

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In the longer term, we intend to pursue licensing agreements with reputable brands in the aforementioned growth regions. By targeting heritage brands with premium positioning in existing high-end markets, we aim to expand into broader mass markets and achieve higher margins.

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As we move ahead, the Group remains committed to navigating global uncertainties with clarity and discipline. Through a multi-pronged strategy focused on operational strength, earnings resilience, and future growth, we aim to deliver stable and sustainable performance for our shareholders.

APPRECIATION

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On behalf of the Board, we extend our sincere appreciation to our management team and staff for their dedication and perseverance amid a challenging operating environment. We also thank our fellow Board members for their invaluable guidance and steady counsel throughout the year.

We remain grateful to our shareholders, business partners, and customers for your continued trust and confidence in KTMG. We look forward to your continued support as we strengthen the Group and build on our resilience in the year ahead.

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Lim Siau Hing
Executive Chairman

Damien Lim Vhe Kai
Executive Director 
Chief Executive Officer​​