Glove manufacturer Riverstone Holdings has reported a strong set of results in its 3QFY2021 business update even as the world tries to move toward an “endemic” Covid-19 strategy.
Revenue for Riverstone grew 35.3% to reach RM652.8 million ($211.75 million), compared to 3QFY2020’s figure of 482.3 million.
Gross profit rose 42% y-o-y to RM357.2 million for 3QFY2021, as average selling prices remain comparatively higher than pre-pandemic levels. Blended gross profit margin stood at 54.7% for 3Q2021.
Riverstone then posted a 49.2% y-o-y increase in net profit attributable to shareholders to RM266.4 million for 3QFY2021.
It also reported cash and cash equivalents of RM1.8 billion as at 30 September 2021, compared to 648.9 million in 3QFY2020. As such, it remains “in a strong position to further its capacity expansion plans and navigate the prevailing industry headwinds,” Riverstone says.
In its release, Riverstone explained demand for its healthcare examination gloves has continued to grow, despite the pandemic moving into the endemic phase in many parts of the world.
See also: Trump wins Republican nomination, setting up rematch with Biden
Market prices, however, have begun to normalise progressively in 3QFY2021 as major distributors have taken a wait-and-see approach for glove prices to stabilise.
See: Hong Kong investor and EPF pare stake in Interra Resources, Riverstone respectively
On the other hand, demand for its high-tech cleanroom gloves remains robust, driven by a sustained growth in orders from long-term customers within the electronics, semiconductors, batteries, sensors and lenses manufacturers.
Riverstone faced temporary delays as a result of the disruption to construction and other related works caused by the Movement Control Order (MCO) in Malaysia for its Phase 7 expansion plans.
This will mean the additional 1.5 billion pieces of new production capacity for Phase 7 will come online by 1Q2022.
But beyond Phase 7, the company says preparations for its latest production facility for Phase 8 is currently underway.
“Subject to prevailing market conditions, Phase 8 is slated to add up to 1.5 billion pieces of gloves to bring the total annual production capacity of Riverstone by up to 13.5 billion by FY2022/23.”
Shares of Riverstone closed at 78 cents on 9 Nov, down two cents or 2.5% lower.
