Thursday 28 Mar 2024
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KUALA LUMPUR (June 19): Top Glove Corp Bhd saw its net profit for the third financial quarter ended May 31, 2018 (3QFY18) surge 51.4% to RM117.57 million from RM77.71 million in 3QFY17, thanks to an increased demand for gloves.

In a filing to Bursa Malaysia this afternoon, Top Glove said it had delivered a sales revenue of RM1.1 billion in 3QFY18, a 26.6% increase year-on-year (y-o-y) and the first time Top Glove has achieved sales revenue of above RM1 billion within a single quarter. The group reported revenue of RM869.64 million in 3QFY17.

Sales volume (quantity sold) surged by a record high of 37% in contrast to the corresponding period in FY17.

Top Glove declared a first interim dividend of 7 sen per share to be paid on July 17.

For the nine-month period ended May 31, 2018 (9MFY18), Top Glove reported a 41.8% y-o-y increase in net profit to RM332.03 million from RM234.08 million, while revenue went up by 19.6% to almost reach RM3 billion. The group's revenue stood at RM2.51 billion in 9MFY17.

Top Glove said the stronger demand growth stemmed particularly from Asia, where demand growth from India, China and Vietnam exceeded 100% on a nine-month basis, as well as Eastern Europe, Middle East and Latin America.

The stronger glove demand also led to better cost efficiencies resulting from a higher utilisation rate.

"Top Glove's focus on continuous quality and cost improvement initiatives, and harnessing technological advances to address business challenges also accounted for the improved profitability.

"Nonetheless, this was offset by a marked increase in the natural gas tariff, while the upward trend in nitrile latex prices compared with 2QFY18 also caused some pricing pressure. Raw material prices were mixed compared with 2QFY18, with the average nitrile latex price up 8.5% to US$1.15/kg, while the average natural rubber latex price was on the downtrend, easing 0.5% to RM4.38/kg," the group said.

Top Glove executive chairman Tan Sri Dr Lim Wee Chai remarked that the group is pleased to have performed exceptionally well this quarter.

"Our continuously strong results are attributed to increased glove demand and also a testament to the effectiveness of our ongoing internal improvement initiatives, which enable us to keep driving down costs, whilst still delivering the high quality gloves our customers have come to expect of us," he said.

Top Glove said it will continue to expand its manufacturing capabilities, organically as well as through mergers and acquisitions and joint ventures.

The construction of Factory 31 (operational by July 2018) and Factory 32 (operational by early 2019) is underway, which, upon completion, will increase the group's total number of production lines by an additional 74 lines and production capacity by 7.4 billion gloves per annum.

As of today, Top Glove has 39 factories (34 in Malaysia, 4 in Thailand, 1 in China) and 618 glove production lines. Its glove production capacity stands at 57.5 billion pieces per annum.

Meanwhile, Top Glove's condom manufacturing facility is expected to be operational by end-June 2018.

The group completed its acquisition of surgical gloves manufacturer Aspion Sdn Bhd on April 5, 2018 and integration of the two businesses is in progress.

In line with the group's expansion plans, in May 2018, Top Glove also completed its acquisition of Duramedical Sdn Bhd, a company that manufactures and markets dental hygiene products such as dental dams, for RM2.85 million. The exercise represents an initiative to diversify into medical related products catering to its customer base.

Top Glove was included as a constituent of the MSCI Global Standard Index effective June 1, 2018, in recognition of its strong and consistent growth.

"In business, challenges will always be there and we must be prepared for them. However, as we continue to undertake quality improvement and cost-saving projects, and leverage advanced technology, I am confident we will be able to conclude our financial year on a healthy and positive note," said Lim.

At noon market close today, Top Glove shares were up 22 sen (1.9%) to RM11.62, with 2.36 million shares changing hands.

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