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Top Glove 4Q earnings halved to RM607.9 mil due partly to US CPB detention order

Felicia Tan
Felicia Tan9/17/2021 05:42 PM GMT+08  • 3 min read
Top Glove 4Q earnings halved to RM607.9 mil due partly to US CPB detention order
Top Glove's shareholders will be receiving 5.4 sen per share for the 4QFY2021 comprising a final dividend and special dividend.
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Top Glove Corporation, the world’s biggest rubber-glove maker, has reported earnings of RM607.9 million ($196.3 million) for the 4QFY2021 ended August.

The figure is nearly half that of the RM1.17 billion in earnings netted in the 4QFY2020, and a 70% plunge q-o-q from 3QFY2021’s earnings of RM2.04 billion.

See also: Top Glove reports record quarterly revenue for 2Q21, pays dividend of 25.2 sen per share

During the quarter, 4QFY2021 revenue fell 31.96% y-o-y to RM2.12 billion, while profit after tax (PAT) fell 47.89% y-o-y at RM631.5 million.

Earnings per share (EPS) on a fully diluted basis, stood at 7.59 sen from 14.53 sen in the same period before.

According to the group, the weaker q-o-q performance was due to a reduction in sale volume brought about by the detention order imposed by the US Customs and Border Protection (US CPB).

The effects of the order were felt during the full three months of the 4QFY2021 compared to the two months in 3QFY2021.

Top Glove was finally cleared to resume the export of its gloves to the US on Sept 10.

In addition, the enhanced movement control order (EMCO), which was imposed in the 4QFY2021, contributed to the lower performance.

During the EMCO, the group’s operations in Selangor were closed for 10 days. The group’s operating capacity also stood at 60% under the restrictions.

Furthermore, average selling prices (ASPs) declined at a steeper rate than raw material prices, reducing profit margins for the quarter.

The softer performance in the quarter was also due to normalising demand, following a mass vaccine rollout.

For the FY2021, Top Glove saw earnings of RM7.87 billion, 4.5 times higher than earnings of RM1.75 billion in the FY2020.

On a fully diluted basis, EPS stood at 97.88 sen, from 21.96 sen in the FY2020.

FY2021 revenue more than doubled to RM16.40 billion, from the RM7.24 billion in the FY2020, while PAT for the FY2021 stood 4.48 times higher at RM7.98 billion.

The strong full-year financial performance was attributable to strong demand for gloves coupled with elevated ASPs driven by the ongoing pandemic.

Despite the softer results for the 4QFY2021, Top Glove has paid a total dividend payout of 71% for the quarter. This comprises a special dividend payout of 21% plus 50% in line with its dividend policy.

Thus, shareholders will be receiving 5.4 sen per share for the 4QFY2021 comprising a final dividend of 3.8 sen per share and a special dividend of 1.6 sen per share.

For the FY2021, the total dividend declared amounts to around 65.1 sen per share, a 452% y-o-y increase from FY2020’s total dividend of 11.8 sen per share.

For more stories about where the money flows, click here for our Capital section

Looking ahead, the group says it is continuing its expansion plans via a combination of organic and inorganic expansions and strategic investments.

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.

Top Glove closed 7.5 cents lower or 7.01% down at 99.5 cents on Sept 17.

Photo: Bloomberg

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