UG Healthcare reports higher revenue but lower earnings

SINGAPORE (Feb 13): UG Healthcare Corporation generated revenue of $53.2 million, up 28.5% y-o-y for 1HFY2020, as the company sold a greater volume of disposable gloves.
However, higher marketing and distribution costs ate into its margins. Earnings, in the same period, dropped by 35.9% y-o-y to $846,000.
Since last June, the company has started major upgrading works on its production facilities, which will add annual capacity of 300 million gloves by June 2021.
Following the outbreak of the Covid-19, it received a surge in orders, prompting the company to put the upgrading on hold so as to fulfill the volume.
“Nevertheless, we are on track to achieve optimal utilisation with the existing production capacity of 2.9 billion gloves per annum in this current financial year, before we embark to construct new production lines,” says Lee Jun Yih, executive director of the company.
Lee is aware that the additional marketing and distribution expenses is costly, but he is taking a longer term view that this investment will help drive longer term growth of its own proprietary brand, Unigloves.
On Feb 13, UG Healthcare shares closed at 28 cents, up 0.5 cent.