SINGAPORE (June 18): Top Glove, the largest glove manufacturer in the world, recorded earnings of RM73.7 million ($24.2 million) for the 3Q19 ended May, some 36.5% lower than RM117.6 million a year ago.
Earnings per share (EPS) fell to 2.92 sen for 3Q19, compared to 4.64 sen for 3Q18.
The decline was mainly attributed to a 22% spike in the price of natural rubber latex price during the quarter, resulting in a mismatch between raw material cost and selling price.
Consequently, operating expenses increased by 14.6% to RM1.10 billion, compared to RM964.0 million a year ago.
In addition, Top Glove says its bottom line was adversely impacted by strong competition.
3Q19 revenue came in at RM1.19 billion, 8.1% higher than RM1.10 billion in the previous year.
The revenue growth was on the back of a 9% increase in sales volume, despite the challenging business environment.
Profit from operations fell 29.3% to RM104.2 million in 3Q19, compared to RM147.3 million a year ago.
Finance costs rose 58% to RM20.0 million in 3Q19, while losses from share of result of associate quadrupled to RM1.9 million.
As at May 31, Top Glove’s cash and cash equivalents stood at RM200.5 million.
Top Glove has declared an interim dividend of 3.5 sen per share for the period, the same as a year ago. This will be payable on July 16.
Lim Wee Chai, executive chairman and founder of Top Glove says: “We will continue to focus our resources on improving our product quality, cost structures and process efficiency, through the adoption of AI, digitalisation, advanced technology and R&D, rather than external factors which are not within our control.”
“As our product is closely linked with a commodity, short-term volatility is to be expected, which may affect our margins during certain financial quarters. However, this is only in the interim. In our business, we expect to perform better in the following quarter and over the longer term,” Lim adds.
Shares in Top Glove closed 3.7% lower at RM1.56 on Tuesday.
