Top Glove Corp has posted earnings of RM2.38 billion ($779.8 million) for the 1QFY2021 ended November, over 10 times its earnings of RM111.4 million in the same period last year.
Quarter-on-quarter, the group’s 1Q earnings were more than double that of its earnings of RM1.29 billion in the 4QFY2020 ended August, which was seen to be the group’s best-ever quarterly performance at the time.
On a fully diluted basis, this translates to earnings per share (EPS) of 29.64 sen from EPS of 1.50 sen a year ago.
Revenue for the quarter jumped 293% to a record RM4.76 billion from 1QFY2020’s revenue of RM1.21 billion, making this the group’s best-performing quarter ever.
Operating profit surged to RM3.10 billion for the 1QFY2021 from RM142 million the year before.
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The robust sales figures were primarily attributable to the strong demand for gloves in both developing and emerging markets, a result from the ongoing Covid-19 pandemic.
The improved profit came from the higher sales output, high utilisation levels which led to higher production efficiency, as well as higher average selling prices (ASPs) in line with market pricing.
In line with its increased earnings, the group has adopted a dividend policy to declare and pay annual dividends of 50% for future FYs.
It has also commenced quarterly dividend payments for FY2021 with a higher dividend payment including a special dividend of 6%, bringing the total dividend per share this quarter to 16.5 sen, which far exceeds the full-year dividend for FY2020.
The dividend will be payable on Jan 11, 2021.
As at Nov 30, cash and cash equivalents stood at RM1.21 billion, almost ten times higher than cash and cash equivalents of RM154 million during the same period last year.
The group also has a net cash position of RM3.45 billion as at Nov 30.
Looking ahead, the group says it maintains an “optimistic outlook” on its prospects despite the challenging and competitive landscape.
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It also estimates that demand for gloves will keep growing by 20% in 2020, 25% in 2021, and 15% following the end of the pandemic.
“We have performed well this quarter and much of the credit must go to our dedicated workforce of 21,000 who have worked very hard, smart and fast to ensure our gloves reach those who need it the most, despite several operational challenges,” says managing director of Top Glove, Dato’ Lee Kim Meow.
“We have had a strong and healthy start to FY2021, which sets a positive tone for the rest of the year. The Board of Directors is proud of the results we have achieved. Having a good set of numbers is important but we also want to positively impact the well-being of the employees and community around us. Employee health, safety and well-being is at the heart of much of what we do, but we are mindful there is much more to be done to uplift the standard of our employee welfare and promise to rectify shortcomings immediately,” he adds.
Shares in Top Glove closed 5 cents lower or 2.2% down at $2.27 on Dec 9.
