Top Glove Corp has reported earnings of RM185.7 million ($60 million) for the 1QFY2022 ended November, down 92.1% from the RM2.36 billion logged a year ago.
Earnings per share (EPS) stood at 2.32 sen for the 1QFY2022, compared to 29.02 sen in 1QFY2021.
Top Glove attributes the softer performance to normalising average selling prices (ASPs) and glove demand following mass vaccine rollouts globally, while customers remained cautious on replenishing orders.
The group recorded sales revenue of RM1.58 billion for the 1QFY2022, 66.7% lower that the RM4.76 billion achieved in 1QFY2021.
In addition, the group says raw material costs declined at a much slower pace in comparison to glove ASPs, thereby impacting profit. Top Glove reported profit before tax of RM258.8 million for the 1QFY2022, 91.6% lower y-o-y.
The group has declared a dividend payment of 1.2 sen per ordinary share.
See also: Second Chance set to report higher 1HFY2023 net profit
Looking ahead, Top Glove views that the current surplus in glove supply will likely be offset in part by the steady and consistent growth in global glove demand.
“Glove demand which continues to be driven by strong market fundamentals, was already growing at a rate of 10% yearly pre-Covid and is expected to increase further even after the pandemic recedes, on the back of heightened glove usage and hygiene awareness,” the company states.
In addition, the group says it is gradually regaining its exports from Malaysia to the US, which is expected to improve sales volume in the coming quarters. Meanwhile, raw material prices are on the downtrend and expected to continue declining at a faster pace going forward.
See also: SIA group wide load factor for Feb was 86.6%, down 0.3% over Jan
Top Glove highlights that In light of the challenging business landscape, the company will defer its expansion plans. ”The group’s growth strategy will include a combination of organic expansion, inorganic expansion and strategic investments,” Top Glove states
By end-2025, Top Glove is projected to have a total of 59 factories comprising 46 glove factories and 13 other factories, 1,486 glove production lines and a glove production capacity of 201 billion gloves per annum.
As at 3.04pm, shares in Top Glove are down 5.5 cents or 7.1% lower at 72.5 cents.
Photo: Bloomberg
