SINGAPORE (Dec 17): Top Glove Corporation has reported earnings of RM111.4 million ($36.4 million) for 1QFY2020 ended November 2019, some 1.2% higher than earnings of RM110.1 million recorded a year ago.

The improvement was largely due to lower taxes of RM13.7 million during the quarter, compared to RM30.2 million a year ago, on the back of tax incentives available to Malaysia and certain overseas subsidiaries.

On a fully diluted basis, earnings per share fell to 4.15 sen for 1QFY2020, from 4.31 sen in 1QFY2019.

1QFY2020 revenue slipped 4.2% to RM1.21 billion, from RM1.26 billion a year ago, due to lower average selling prices (ASPs) and lower average raw material prices.

The nitrile glove segment continued to perform well, delivering strong sales volume growth of 20% and significantly higher contributions to group profit.

The improved profit from the segment was boosted by ongoing technological advancements, as well as automation and digitalisation initiatives which resulted in more efficiency and better quality control.

Ongoing organic expansion to increase nitrile capacity also allowed the group to further grow sales, cater to larger customers and capture a bigger market share in the US, Western Europe and Japan.

However, the improvement in the nitrile glove segment was offset by weaker contributions from the natural rubber and the vinyl glove segments.

As at end November, cash and cash equivalents stood at RM154.1 million.

In the face of a difficult business environment, Top Glove remains upbeat in terms of outlook.

“While it may be challenging and competitive, the new year will also bring opportunities which we are excited to leverage,” says Tan Sri Dr Lim Wee Chai, executive chairman of Top Glove.

“Industry prospects remain promising and to ensure we are well-positioned to tap the growing glove demand, we will continue to prioritise R&D, innovation and Industry 4.0 initiatives,” he adds. “These will enable us to increase quality, operational efficiency and effectiveness, while keeping our customers satisfied, which ultimately allows us to deliver good results in the quarters to come.”

As at 3.07pm, shares in Top Glove are trading 2 cents higher, or up 1.4%, at $1.48.