Business

Top Glove quarterly profit soars 1,640% on pandemic demand

SINGAPORE – Top Glove Corporation Bhd, the worlds largest maker of rubber gloves, reported quarterly profit that soared 1,640-per cent amid the coronavirus pandemic, and said its “best days are still ahead of us” despite vaccines in the pipeline.

The Malaysian company, which is dual-listed in Kuala Lumpur and Singapore, on Thursday (Sept 17) posted record net profit of RM1.29 billion (S$423.7 million) for the fourth quarter ended Aug 31, compared with RM74.2 million a year ago, beating median analyst forecast of RM349.2 million from a poll by Refinitiv.

Foruth-quarter revenue jumped 161 per cent year on year to RM3.11 billion. Earnings per share for the quarter increased to 15.82 sen from 0.95 sen a year ago.

For the full financial year, Top Gloves earnings swelled more than fivefold to RM1.87 billion from RM364.7 million previously. Revenue rose 51 per cent to RM7.24 billion from RM4.8 billion.

For its 57,000 public shareholders, Top Gloves board recommended a final dividend of 8.5 sen per share. This makes for a full-year dividend payout of 11.8 sen per share – up 373 per cent from the previous year. The total payout of about RM961.2 million translates to a net profit payout ratio of 51 per cent.

With strong global demand, Top Glove said it was able to raise its average selling prices.

Its bottomline was also boosted by productivity enhancements such as utilisation levels close to 100 per cent, which amplified production efficiency and reaped economies of scale. High utilisation helped lower overheads significantly, notably the cost of labour and natural gas, said Top Glove.

Looking ahead, the company said its gloves would still be required even when a vaccine becomes available. It estimates glove demand to grow 25 per cent next year and 15 per cent post-pandemic.

Top Glove executive chairman Lim Wee Chai said: “Our unprecedented performance underlines the effectiveness of our ongoing technology-driven improvement initiatives, which focus on quality and cost efficiency, and which have enabled us to meet the increase in glove demand.

“With glove demand still on the uptrend, we believe our best days are still ahead of us.”

The company has earmarked RM8 billion for capital expenditure over the next six years. This will give it additional capacity of 100 billion gloves. The funds will be invested in new capacity and the enhancement of existing manufacturing facilities, among others.

Top Glove also said it “continues to actively engage wiRead More – Source