Top Glove Corporation has reported a loss of RM463.1 million ($134.2 million) for the 4QFY2023 ended Aug 31, down from the RM63.0 million loss in the corresponding period the year before.
For the FY2023, the group plunged into the red with an RM926.6 million loss, down from earnings of RM225.6 million in the year before.
Revenue for the three-month period came in at RM475.9 million, which stood at nearly half of the RM989.9 million in revenue for the 4QFY2022.
For the 4QFY2023, the group reported a loss before tax of RM461.9 million, down from the loss before tax of RM51.1 million in the 4QFY2022.
The group’s loss after tax of RM454 million for the 4QFY2023 included a goodwill impairment of RM138 million; and impairment and write-off of property, plant and equipment of RM251 million. Without the impairments, Top Glove’s loss after tax for the quarter would have stood at RM65 million, marking a sequential improvement from 3QFY2023’s loss after tax of RM120 million.
“Our 4QFY2023 performance is encouraging against the uncertain environment which continues to impact the glove industry. This is largely the result of our ‘Turnaround Plan’ and we will continue to pursue the strategies outlined towards regaining lost ground and expediting our recovery”, says Lim Cheong Guan, managing director of Top Glove.
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The group’s turnaround plan included streamlining its production facilities, which saw the group leveraging newer and more efficient factories while temporarily ceasing operations at some of its factories, thereby saving operation, utilities and manpower cost.
Revenue for the 12-month period fell by 59.5% y-o-y to RM2.26 billion. The group registered a loss before tax of RM898.0 million, down from profit before tax of RM358.4 million in the year before.
Basic earnings per share (EPS) stood at a negative 11.57 sen compared to the EPS of 2.82 sen in FY2022.
No dividends were paid out this year, compared to the 1.20 sen paid out in FY2022.
As at Aug 31, Top Glove’s net assets per share stood at RM0.59, down from RM0.70 in the year before.
Cash and cash equivalents as at the same period stood at RM290.1 million, down from RM437.6 million in the previous year.
Looking ahead, the group says it will focus on improving the performance of its core glove business “particularly through quality and cost enhancement initiatives as well as innovation, to better meet the evolving needs of its customers”.
It adds that it foresees a “positive industry outlook as gloves are an essential, single use item in the healthcare, industrial and food and beverage sectors with no viable replacement, a strong indication of continual demand growth for gloves”. There is also an encouraging uptrend in the demand for gloves, continues the group.
“We believe the mid to long term prospects for the glove sector remain promising. We are already seeing an uptick in sales volume month to month which indicates our customers’ glove inventory is close to being depleted. As the oversupply situation also continues to ease, we look forward to seeing global glove demand resuming its projected 8% to 10% growth per annum eventually and better times ahead,” says Lim.
“Top Glove remains wholly committed to delivering high quality products at an efficient cost to our customers, while implementing sustainable business practices. The group will continue to improve and innovate; and we are confident of getting through this challenging period, as we move forward onto recovery and beyond”, he adds.
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Share buybacks
In a separate filing dated Oct 6, Top Glove says it is seeking its shareholders' approval to buy back 10% of its shares at its upcoming annual general meeting (AGM). The company had issued a similar notice on Sept 20, 2022, to buy back another 10% of its shares at its previous AGM.
As at 2.46pm, shares in Top Glove are trading 0.5 cents lower or 2.22% down at 22 cents.
