TOP Glove Corp Bhd posted a 20-time jump in its 1Q 9/FY2021 net profit to RM2.4 bil from the same period a year ago and doubled that against the previous quarter of 4Q FY9/2020.
For the period under review, the group saw its revenue escalated 294% to RM4.8 bil from 1Q 9/FY2020 and 53% on a quarter-on-quarter (qoq) basis. Meanwhile, its sales volume (quantity sold) improved by a healthy 34% from 1Q FY9/2020.
Top Glove attributed its robust sales figures to the strong demand for gloves in both developing and emerging markets owing to the ongoing COVID-19 pandemic.
The improved profit came on the back of higher sales output, high utilisation levels which amplified production efficiency, as well as higher average selling prices (ASPs) in line with market pricing.
The company said it will continue to pursue organic expansion, inorganic expansion and strategic investments in line with strong global glove demand which is estimated to grow from a pre-pandemic level of about 10% per annum to about 15% post-pandemic following increase in usage coupled with heightened hygiene awareness.
“The group has earmarked RM10 bil for capex over the next five years from FY2021 to FY2025 which will increase capacity by an additional 100 billion pieces of gloves,” Top Glove said in a media statement.
Keeping to its firm commitment to reward its 100,000-strong public shareholders, Top Glove has commenced quarterly dividend payments for FY2021 with a higher dividend payment incorporating a special dividend of 6% where the total dividend per share of 16.5 sen for this quarter (1Q FY9/2021) far exceeds the full year dividend for FY2020.
The dividend ex-date is Dec 24 with payment due on Jan 11.
“The total dividend pay-out ratio of 56% of the profit which exceeds its established dividend pay-out policy of 50% includes the 6% special dividend in light of the group’s extra good performance and in appreciation of its shareholders’ support,” noted Top Glove.
As of end-November, the group was in a net cash position of RM3.45 bil.
Against the backdrop of a challenging and competitive landscape, Top Glove maintains an optimistic outlook that glove demand will keep growing by 20% per annum in 2020, 2021 (25%) and 15% post-pandemic.
“The steady increase in sales orders from its loyal customers in 195 countries across the world, alongside capacity building plans and technology-driven quality, productivity and efficiency improvements, bode well for the group’s performance going forward,” added the world’s largest glove manufacturer. – Dec 9, 2020
