Glove maker UG Healthcare has reported a loss of $4.78 million for 1HFY2023, a sharp swing from earnings of $21.2 million recorded in the year earlier.
Revenue for the six months ended Dec 31 2022 was $55.9 million, down 52.3% y-o-y from $117.3 million.
The company attributes the losses to a "rapid decline" in the average selling prices across all product segments.
Higher costs including wages and power tariffs also helped "undermine" the 1HFY2023 numbers.
"Whilst we anticipated the declining ASP trend and lower demand in disposable examination gloves as we adapt to normality, the disequilibrium between the demand and supply of disposable gloves is likely to take some time to equilibrate," says Lee Jun Yih, UG Healthcare's executive director and finance director.
"The inflationary pressure on fixed overheads such as electricity and gas tariffs, hike in minimum labour wage and new employment act, however, added burden to the upstream manufacturing business," he adds.
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The company plans to further postpone the addition of production capacity of some 1.2 billion pieces per year. This addition was originally planned for October 2022.
"The group prefers to maintain relatively higher utilisation at its existing manufacturing facilities of 3.4 billion pieces of gloves per annum in order to achieve better production efficiency," says UG Healthcare.
UG Healthcare shares closed at 18 cents on Feb 14, up 0.57%.
