Top Glove’s 1Q net profit rises to RM111 mil

KUALA LUMPUR: Top Glove Corp Bhd, the world’s largest maker of rubber gloves, posted a 1.2% yoy growth in net profit to RM111.43 mil for the first quarter ended Nov 30, 2019, on higher contribution from nitrile gloves following a capacity expansion in that segment.

However, the better performance of the nitrile glove segment was offset by weaker contributions from the natural rubber (NR) and vinyl glove segments, the company said in a filing with Bursa Malaysia today.

Despite a 0.2% rise in sales volume, the group’s revenue fell 4.2% to RM1.21 bil from RM1.26 bil previously due to lower average selling prices and lower average raw material prices.

Top Glove said its sales volume growth in the NR segment was lower yoy following slower demand growth in developing countries compared with the same period last year.

“However, the group is confident that demand growth in developing countries will pick up going forward, driven by increased healthcare awareness arising from improved standards of living,” it said.

The nitrile glove segment delivered a 20% sales volume growth in the period under review, capturing a bigger market share in the US, Western Europe and Japan, the company said.

On its prospects, the group said it would continue to pursue expansion in order to meet the increase in global glove demand, which is set to grow by 10% yearly.

“This will boost the group’s total number of production lines by an additional 178 lines and production capacity by 21.3 billion gloves per annum, representing an increase of 30.4% in capacity over the next two years.

“By December 2021, Top Glove is projected to have 861 production lines and a production capacity of 91.4 billion gloves per annum,” it said.

Top Glove said it would continue to invest in existing line refurbishment and building new technologically advanced glove factories, which will feature more automation and digitalisation initiatives, such as an automated guided vehicle transport and warehouse management system, production supervisory control and data acquisition system.

“In addition, the group will continue to explore merger and acquisition and joint ventures, while also diversifying into rubber or healthcare-related businesses.

“Reflecting the importance of research and development and innovation at Top Glove, plans are in progress to establish a manufacturing and research centre of excellence, the group’s new state-of-the-art hub for R&D and product innovation embracing Industry 4.0 initiatives, based in Banting,” it added. – Dec 17, 2019, Bernama

Share on facebook
Share on twitter
Share on whatsapp
Share on email

Subscribe and get top news delivered to your Inbox everyday for FREE