UG Healthcare reported earnings of $12.6 million for 2H20 ended June, a 956.9% surge compared to earnings of $1.2 million in 2H19.

This brings FY20 earnings for the company to $13.4 million, from the $2.5 million a year ago.

Revenue for 2H20 and FY20 increased 80.9% and 57.2% y-o-y to $91.0 million and $144.2 million respectively.

UG Healthcare says the “significant increase” in revenue and net profit were attributable to the increase in the volume of glove products produced and sold. The increase was also contributed by new production lines, as well as the increase in the selling prices of gloves amid the Covid-19 outbreak.

2H20 gross profit surged 225.9% y-o-y to $32.8 million due to the higher selling prices of gloves, which brings the company’s FY20 gross profit to a total of $42.5 million.

2H20 gross profit margin saw a 16 percentage point increase to 36%, and a 9.1 percentage point increase to 29.5% for FY20.

On the back of higher earnings, UG Healthcare has declared a first and final dividend of 0.714 cents per ordinary share for FY20, an increase from the 0.259 cents a year ago. Shareholders will have the option of receiving their dividends in scrip or cash.

Geographically, UG Healthcare’s largest market is in Europe, which saw a 21.6% y-o-y increase to $51.8 million. Its South American market saw the largest growth with a 191.3% increase y-o-y to $47.5 million.

Sales in Africa and Asia increased by 83.1% and 52.1% y-o-y to $7.0 million and $13.0 million respectively.

For FY20, UG Healthcare logged higher other expenses of $6.3 million compared to the $0.2 million in FY19 due to the volatile fluctuations of the functional currencies including the Brazilian real, Chinese renminbi, and British pound against the US dollar, which led to foreign exchange losses.

In addition, the company recorded $0.6 million of allowance for doubtful debt in FY20.

“The global pandemic jolted everyone from our conventional lifestyle and led the group to a breakthrough pushing us forward at a quicker pace, as we have seen in our fourth quarter performance,” says UG Healthcare executive director Lee Jun Yih.

Lee added that UG Healthcare intends to bring forward its production capacity expansion plans to cope with the higher demand.

“The earlier planned additional capacity of 300 million pieces of gloves per annum by end June 2021 will be brought forward to March 2021 and the intended additional capacity will be raised by 200 million pieces per annum to 500 million pieces of gloves per annum,” he adds.

Shares in UG Healthcare closed 11 cents higher, or 3.4% up at $3.37 on Aug 11, prior to the announcement.