Top Glove Corp has posted earnings of RM2.03 billion ($651.6 million) for its 3QFY2021 ended May, 5.9 times higher from the RM347.9 million recorded in the 3QFY2020.
This brings Top Glove’s 9MFY2021 earnings to RM7.3 billion, 12.6 times higher than the RM575 million reported for the 9MFY2020.
On a fully-diluted basis, this translates to earnings per share (EPS) of 25.42 sen for the 3QFY2021, compared to 4.16 sen the previous year; and EPS of 90.14 sen for the 9MFY2021, compared to 7.04 sen the previous year.
Revenue grew 147% y-o-y to RM4.2 billion for the 3QFY2021. For the 9MFY2021, revenue surged 246% y-o-y to RM14.3 billion.
Profit after tax (PAT) for the 3QFY2021 came in at RM2.06 billion, up 490% y-o-y. For the 9MFY2021, PAT grew 11.7 times y-o-y to RM7.4 billion.
Top Glove attributes the higher y-o-y revenue due to continued demand for gloves globally, driven by the ongoing pandemic. Meanwhile, the improved PAT came on the back of higher sales output, coupled with higher average selling prices (ASPs) which peaked in February. The group also cites ongoing enhancements across its operations including digital transformation, R&D, quality and productivity initiatives, and talent acquisition and development as reasons for the better performance.
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On a sequential basis, however, Top Glove’s revenue and PAT figures were softer quarter on quarter, easing 22% and 29% respectively. Top Glove attributes the softer q-o-q performance to lower ASPs as well as a decline in sales volume q-o-q by 4% due to a reduction in sales in the US following a temporary halt in shipments in compliance with US Customs and Border Protection.
The group’s net cash position as at May 31 stands at RM4.23 billion.
Top Glove has declared a dividend payout for the 3QFY2021 of 8 sen per share, comprising an ordinary dividend of 12.7 sen per ordinary share as well as a special dividend of 5.3 sen per ordinary. The ex-dividend date is June 23, while the payment date is July 7.
This brings the total dividend declared for 9MY2021 to 59.7 sen per share, representing a 406% increase from the full-year dividend for FY2020 of 11.8 sen per share.
Lee Kim Meow, managing director of Top Glove says the group continues to do well despite a “tough environment”.
“This is attributed to technological advancements towards Industry 4.0, as well as R&D and innovation, and most importantly, good people. The softer quarter on quarter results for 3QFY2021 was due to the declining ASPs in line with glove market pricing trends, as well as the impact of glove sales from Malaysia to the US CBP, which we are working closely with the US CBP to speedily resolve,” he says.
Looking ahead, the group says it will continue striving to meet the growing global glove demand, which is estimated to grow from a pre-pandemic level of about 10% per annum to about 15% per annum post-pandemic.
To that end, Top Glove’s strategy will include a combination of organic expansion, inorganic expansion and strategic investments. By Dec 31, 2024, Top Glove is projected to have a total of 60 factories comprising 47 glove factories and 13 other factories, 1,512 glove production lines and a glove production capacity of 205 billion gloves per annum.
The group has also declared 2021 as the year of environmental, social and governance (ESG) for the group, with initiatives aimed at lowering carbon emissions, establishing whistleblowing channels, and improving health and safety measures for employees, among others.
As at 2.39pm, shares in Top Glove are up 4 cents or 2.55% higher at $1.61 on the SGX, and up 1 sen or 0.21% higher at RM4.79 on Bursa Malaysia.
