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 2024 (“FY2024”).

We report that our strategic entry into the athleisure market last year has driven solid growth, as evidenced by increased apparel orders. To support this growth, we invested in enhancing our production capabilities to accommodate rising order volumes and manage more intricate designs and complex products. As part of these initiatives, we upgraded our apparel manufacturing facilities in Cambodia by installing new auto-cut and auto-spread machines during the first half of 2024.

However, delays in commissioning of the new auto-cut machines significantly disrupted production, resulting in a shortage of cut pieces for the sewing lines and affecting productivity. Consequently, production capacity was insufficient to meet demand, leading to order backlogs and missed delivery deadlines. These delays impacted deliveries to key customers with a significant portion of shipments requiring expedited air freight, thereby increasing logistics costs. Additionally, tight delivery schedules resulted in higher labour and production-related expenses.

 

FINANCIAL HIGHLIGHTS

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In FY2024, the Group recorded revenue of S$104.5 million, an increase of 17.8% from the previous year. This was largely driven by orders from a new customer in Japan amounting to S$15.1 million. Orders from existing apparel customers also increased, with revenue rising by S$10.9 million in the United States (“US”), S$5.8 million in Canada, and S$2.0 million in the European Union. However, this growth was offset by a significant decline of S$19.4 million in the United Kingdom, where a key customer experienced weaker sale.

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Gross profit declined by 8.0% year-on-year to S$7.5 million, mainly due to rising raw material costs attributable to changes in the product mix, increased labour costs due to production bottlenecks in the cutting department, caused by delays in commissioning new machinery, which resulted in higher overtime expenses during the peak period, and higher export handling costs resulting from these delays. As a result, the gross profit margin fell from 9.1% in FY2023 to 7.1% in FY2024.​

 

The production delays also impacted logistics costs. To ensure timely fulfilment of customer orders, we used expedited air shipments, resulting in a significant increase in air freight expenses to S$3.6 million in FY2024 from S$0.01 million in FY2023.

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Consequently, the Group recorded a net loss attributable to shareholders of S$5.7 million in FY2024.

 

LOOKING AHEAD STRATEGICALLY

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Looking ahead, we are closely monitoring the potential impact of the reciprocal tariffs announced by the US Trump administration on its major trading partners, including Cambodia and Malaysia, where our production facilities are located. As the US remains one of our key markets for apparel products, the recent development has introduced some uncertainties in the near term. However, we are encouraged by the indicated willingness of the governments in our production base countries to engage in negotiations with the US. We expect greater clarity to emerge in the coming weeks or months, which will help shape a more informed view of the operating environment.

Despite these challenges, we remain committed to building resilience within our operations, leveraging our integrated textile and apparel manufacturing capabilities to navigate evolving market conditions and drive long-term sustainable growth. As the global supply chain adapts in response to the tariffs issue, we anticipate market shifts that may lead to diversification in our customers’ sourcing strategies. We will proactively respond to these changes, which we believe may present opportunities to broaden our customer base and strengthen our market position.

 

As we move forward, we will focus on driving profitability by selectively targeting higher-margin customers based on Customer Lifetime Value (CLV) metrics, optimising orders for the peak seasons, and enhancing operational efficiency. We will also prioritise the timely and effective execution of our order book to ensure smooth operations and meet market demand. At the same time, we will strengthen our financial resilience by improving cost management and optimising working capital utilisation.

To lessen the impact of seasonality and reduce demand fluctuations, we aim to secure consistent orders and production volumes throughout the year by establishing longer-term contracts with certain key customers. This will enhance stability, enabling the Group to navigate market fluctuations more effectively. Additionally, our strategic focus on athleisure and casual wear continues to drive demand, strengthening our long-term growth potential and market resilience.

In the year ahead, we are making a strategic investment to expand our textile manufacturing capabilities through the acquisition of new finishing machines. This investment will enable us to collaborate with a new customer by supplying their best-selling fabric for use in apparel sold in the US market. With enhanced finishing capabilities, we will be equipped to develop and customise fabric to meet the customer’s specific requirements. These initiatives are expected to increase production capacity, drive revenue growth, and strengthen customer relationships, reinforcing the Group’s foundation for sustained success.

APPRECIATION

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As always, we extend our deepest appreciation to our staff and management team for their tireless efforts and dedication. We also thank our fellow Board members for their invaluable guidance and insights throughout the year in navigating challenges.

Finally, we are grateful to our shareholders, business partners, and customers for their continued trust and confidence in KTMG. We look forward to your ongoing support as we grow stronger and shape the future together.

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Lim Siau Hing
Executive Chairman

Damien Lim Vhe Kai
Executive Director 
Chief Executive Officer

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