22 June 2024, Saturday | 12:15pm

Top Glove's Q1 net profit surges 21-fold to RM2.4bil


KUALA LUMPUR: Top Glove Corp Bhd's net profit catapulted more than 21 fold to RM2.40 billion in the first quarter (Q1) ended November 30, 2020, from RM111.43 million recorded a year ago.

In an exchange filing today, the world's largest glove producer attributed this to higher sales output, high utilisation levels which amplified production efficiency, as well as higher average selling prices (ASPs) in line with market pricing.

Top Glove said its ongoing technological advancements towards automation and digitalisation initiatives, effective talent development, as well as continuous innovation, quality and productivity enhancements contributed to the improved bottomline.

Group revenue surged 293.40 per cent year-on-year (YoY) to RM4.76 billion from RM1.21 billion previously.

Top Glove said the uptrend in raw material prices had continued, as natural latex concentrate increased by 18 per cent to an average of RM5.14 per kilogramme (kg) and nitrile latex up 24 per cent to an average of US$1.31 per kg quarter-on-quarter (QoQ), driven by less favourable weather conditions and supply constraints, against a backdrop of increased glove demand.

The group declared a single tier dividend of 16.5 sen per share in Q1, payable on January 11 next year.

Managing director Datuk Lee Kim Meow said Top Glove had performed well during the quarter and much of the credit must go to its workforce of 21,000.

"We are humbled to have a crucial role in helping protect and save lives in Malaysia and all over the world with our gloves. It saddens us that some of our employees have also been affected by Covid-19.

"Every effort has been extended to provide our people with a safe and healthy operating environment. We reiterate our commitment to continue making the necessary improvements towards ensuring the continued safety, health and well-being of our employees, which is our top priority," Lee said in a separate statement today.

He said Top Glove had recognised the need to continue improving and comply with international standards in terms of employee welfare.

The group will continue to pursue organic expansion, inorganic expansion and strategic investments in line with strong global glove demand which is estimated to grow from a pre-pandemic level of about 10 per cent per annum, to about 15 per cent per annum post-pandemic.

Top Glove has earmarked RM10 billion in capital expenditure over the next five years from its fiscal years 2021 to 2025, which will increase capacity by an additional 100 billion pieces of gloves.

The group remains hopeful of an effective vaccine to address the dire situation and is encouraged by reports of developments and progress made in recent days.

However, even with a vaccine, Top Glove said gloves would still be needed for testing and administering the vaccine, citing that pre-pandemic, global glove demand was already growing about 10 per cent and was expected to continue to grow steadily driven by strong market fundamentals across all geographies.

"We remain optimistic about our prospects. With the pandemic, we estimate that glove demand will keep growing, by 20 per cent per annum in 2020, 25 per cent per annum in 2021 and 15 per cent per annum post-pandemic.

"The steady increase in sales orders from its loyal customers in 195 countries across the world, alongside capacity building plans and technology-driven quality, productivity and efficiency improvements, bode well for the group's performance going forward," it added.

Source: New Straits Times


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