Top Glove achieves record-breaking net profit of RM 350 billion

In its financial results for the Third Quarter ended May 31, Top Glove attained a sales revenue of RM 1.7 billion, making it the company’s highest ever quarterly revenue.

The hike was an increase of 42 percent compared with its 3QFY19 and a 37 percent hike versus 2QFY2020.

The company’s Profit Before Tax (PBT) cam in at RM 422 million, staging a triple-digit gain of 413 percent and 224 percent, year-on-year and quarter-on-quarter respectively.

As for Profit After Tax, Top Glove recorded an impressive RM 350 million, an increase of 365 percent year-on-year and 202 percent quarter-on-quarter, which at the nine-month mark made up 95 percent of FY2019’s full year achievement.

Following the growth of its organic expression, Top Glove has secured its position as the world’s largest manufacturer of nitrile gloves. This comes after it secured its position as the world’s largest manufacturer of natural rubber gloves and surgical gloves.

The Group’s 9MFY2020 performance recorded RM 4.1 billion in sales revenue while Profit Before Tax was RM 677.8 million. Profit After Tax was RM 577.8 million, rising 97 percent from the corresponding period last year, and far exceeds the total net profit for the full financial year 2019 by 57 percent.

Monthly sales orders went up by some 180 percent, resulting in long lead times, which went up from 40 days to around 400 days, whereby orders placed now would only be delivered over a year later.

Furthermore, the Group’s utilisation rate rose from a pre-Covid level of 85 percent to above 95 percent in 3QFY2020, resulting in greater efficiency and economies of scale. Additional capacity which came onstream in 3QFY2020 also enabled the Group to meet demand growth, while upward revisions in average selling prices (ASPs) in line with prevailing market prices were also affected.

“Gloves are an essential item in winning this war on COVID-19. It is a tremendous privilege to be in a position to help protect people in Malaysia and throughout the world from this dangerous virus, and we will continue to work safely and efficiently to produce as many gloves as possible at this critical time”, executive chairman Dr Lim Wee Chai said.

Top Glove emerged the best performing stock on both the Kuala Lumpur Composite Index (KLCI) and the Straits Times Index (STI), having seen its share price increase by 263 percent and 268 percent, year-to-date, respectively. As at June 10, it ranked the 6th largest company on Bursa Malaysia and the 12th largest company on SGX in terms of market capitalisation, placing it amongst the elite Top 15 companies on both bourses.

The company has also earmarked RM3 billion for CAPEX to build 450 new lines, creating new capacity of 60 billion pieces of gloves from CY2020 to CY2026.

Additionally, As at 31 May 2020, Top Glove’s financial position improved significantly, with a net cash position of RM279 million compared with net borrowings in 2QFY2020. This has enabled the Group to fund CAPEX requirements.

The global glove demand is expected to grow from a pre-Covid level of 8 percent to 10 percent per annum to 12 percent to 15 percent per annum post-Covid, on the back of increased usage in both the medical and non-medical sectors as well as heightened awareness.

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