SINGAPORE (Nov 7): Glove manufacturer Riverstone Holdings has announced earnings of RM34.3 million ($11.1 million) for 3Q17, representing a 15.1% increase from RM29.8 million in the same period a year ago on higher revenue.

This brings the group’s earnings to a total of RM95.1 million for the nine months ended Sept, up 12.8% from RM84.3 million in the previous year.

Revenue for the quarter grew 12.5% to RM187.8 million from RM167 million in 3Q16, as Riverstone witnessed an increase in demand for both its healthcare and cleanroom gloves over the quarter.

This comes on the back of a competitive industry landscape, where the average selling prices (ASPs) of the gloves were also affected by macroeconomic variables such as a weakened US dollar and lower raw material prices during the quarter, says the group in Tuesday regulatory filing to the SGX.

In line with the increase in total revenue, cost of sales increased 11% to RM137 million from RM123.4 million a year ago.

Selling and distribution expenses decreased to RM3.6 million from RM4 million previously, mainly due to reduction in marketing expenses.

This was however more than offset by higher general and administrative expenses as well as other operating expenses, which grew 15.1% and 254.4% due to increased expenditure in staff benefits, and the impact from net foreign exchange & fair value in derivatives, respectively.

All in all, the group recorded double digit growth for both profit before tax and profit after tax at RM39.7 million and RM34.3 million respectively.

Noting continued challenges such as volatility in raw material prices, increase in overall production costs, and competition from other glove manufacturers, Riverstone estimates that its total annual production capacity will reach 7.6 billion gloves by end-Dec this year.

The group says it also has plans to add another 1.4 billion pieces of gloves by the end of 2019 as part of Phase 6 of its expansion plans, which will give it a total annual production capacity of 10.4 billion pieces of gloves.

“While the group’s profitability was affected by the spike in raw material costs earlier this year, we have benefited from lower raw material prices during the quarter and are pleased to note that prices have remained stable since,” says Riverstone CEO Wong Teek Son.

“We continue to maintain effective oversight of cost controls as we strive to minimise the impact of the external macroeconomic factors alongside industry competition that challenge our business. Further, our commitment to improving operational efficiencies such as increasing automation processes in our production has also contributed positively to our consistent net profit growth over the quarters,” he adds.

Shares in Riverstone closed 1.4% higher at $1.08 on Tuesday.