SINGAPORE (March 16): Top Glove posted a 21% fall in 2Q17 earnings to RM83.1 million ($26.3 million) from a year ago on the back of sharp increases in raw material prices.
Sales revenue rose 23% to RM851.2 million as volume of products sold was up 9%.
But the average latex price surged to a five-year high, rising 72% to RM5.95/kg in 2Q17 from 2Q16.
Despite less favourable conditions, Top Glove says improvements adopted across the manufacturing process enabled the group to maintain good quality while managing its costs efficiently.
The implementation of upward price revisions, the effects of which were felt in 2Q17, were also instrumental in normalising revenue figures compared to the previous quarter.
For 1H17, earnings came in 33% at RM156.8 million from 116, again due to higher raw material prices.
Looking ahead, Top Glove expects the business environment to be increasingly challenging, with competition intensifying on a larger scale.
But it expects global demand for medical gloves to continue growing by 6% to 8% every year.
By December 2018, the group also expects to have 632 production lines and a production capacity of 60 billion gloves per annum.
As at Feb 28, the group maintained a positive net cash position of RM38.6 million and a healthy balance sheet.
As at 3.11pm, shares of Top Glove are trading at $1.63.
