Riverstone Holdings, the manufacturer of nitrile and natural rubber gloves used in the high-tech and healthcare industries, reported a doubling in revenue to a record of RM 52.8 million ($22.7 million) for the quarter ended 31 March 2010 (1Q 2010) due to strong demand from semiconductor and healthcare customers. Net profit surged almost six times to RM10.5 million from RM 1.8 million achieved a year ago.

1Q 2010 gross margin expanded from 19% to 31%, on the back of greater production efficiency arising from the higher sales as well as better productivity. Consequently gross profit rose three-fold to RM 16.5 million from RM 5 million previously.

Other income rose from RM 0.1 million to RM 0.5 million, mainly due to a settlement received from a local utility company for disruptions caused to Riverstone’s operations. Selling and distribution expenses increased 17% to RM 1.4 million due to higher handling and forward expenses.

General and administrative expenses rose by 54% to RM2.8 million on the back of increased payroll costs while other operating expenses rose to RM 1.1 million as a result of net foreign exchange losses compared to net foreign exchange gains previously. Due to the repayment of borrowings, finance costs fell 52% to RM0.01 million.

1Q 2010 pretax profit rose 452% to RM 11.6 million. Due to a lower effective tax rate of 9.8% (1Q2009: 13.5%) resulting from higher reinvestment allowance and the higher profits of certain overseas subsidiaries enjoying tax concession status. Earnings per share were 3.4 sen (1Q 2009: 0.6 sen). Annualised return on equity was a robust 24%, up from 17% for 2009.

Cash and cash equivalents increased from RM 47.2 million as at 31 December 2009 to RM 51.3 million as at 31 March 2010. The group generated RM 12.7 million in operating cashflows, while it used RM 6.6 million for its financing and investing activities.