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.

See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/results/thaibev-reports-20-higher-earnings-2854-mil-2qfy2022?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>ThaiBev reports 20% higher earnings of $285.4 mil for 2QFY2022</a>

The group has declared a dividend payment of 1.2 sen per ordinary share.

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: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='/capital/results/comfortdelgro-reports-304-higher-1qfy2022-patmi-767-mil?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>ComfortDelGro reports 30.4% higher 1QFY2022 PATMI of $76.7 mil</a>

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.

Top Glove 1QFY22 earnings down 92% y-o-y on lower ASPs and glove demand

RHB positive on ThaiBev as its recovery party is underway

DBS upgrades SIA to 'buy' on 'colossal' pent up demand for travel

U.S. Stocks Extend Losses in Late Session Selloff: Markets Wrap

Can automation help your company fight the Great Resignation?

Top Glove 1QFY22 earnings down 92% y-o-y on lower ASPs and glove demand

Related Stories

Highlights

Tech stocks are in a bear market, but they aren't cheap

Related Stories

Q&M sees 31% drop in earnings of $6.5 mil for 1QFY2022

Aoxin Q&M reverses into net profit of RMB2.8 mil for 1QFY2022

Food Empire reports NPAT of $9.2 mil, up 34.4% for 1QFY2022