The glove sector is seeing another run as new wave of the Covid-19 cases ravages across the globe, Supermax in its Q3 results delivers another set of remarkable earnings amid continuous robust demand for its rubber gloves.
For the quarter, the group registered revenue of RM1.938 billion an increase by 333.2% as compared to the corresponding quarter a year ago. Profit Before tax increased by 1,308.8% to RM1.342 billion and profit after tax surged by 1,313.0% to RM1.022 billion. This was a record, setting for another strong quarter with sales revenue close to the RM2.0 billion level again while profitability at EBITDA, PBT and PAT levels all remaining well in excess of RM1.0 billion.
As for profit margins they were maintained at near record levels achieved in the preceding quarter margins at 70.4%, 69.3% and 52.8%, respectively. Together with this stellar performance, Supermax declared a special dividend of 13 sen per ordinary share for the current financial year ending 30 June 2021. To-date, Supermax has declared dividends of 16.8 sen in respect of the current financial year. Supermax is currently sitting on cash & bank balance of RM3.986 billion.
Revenue would have been much higher if the temporary closure at the Meru plants did not take place, this was however done due to a complete sanitisation and deep-cleansing exercise following the detection of several Covid-19 cases among the foreign workers.
However to cope with the demand, Supermax has completed the commissioning of the remaining production lines at its factory and currently building 5 new glove manufacturing plants scheduled for completion progressively between now and year 2022. The new plants costing RM1.39 billion will add 22.25 billion new capacity bringing the group’s total capacity to 48.42 billion gloves by end 2022. Supermax has also earmarked capital expenditure of US550 million for the US market, the company is working with various government agencies in the US to identify suitable manufacturing site, negotiating with various agencies, counties & local governments for providing the full infrastructure that the company needs for production.
Noting on the entrants of new glove players jumping into the bandwagon in addition to current players increasing capacity in large scale from China, Malaysia and in Thailand, it is expected for global glove prices to decrease. But the unique position of Supermax with the Own Brand Manufacturing (OBM) model whereby the company manufactures the products, package and market under its In-house brands could strengthen its position. Supermax currently export 58% of production under its own brands via its own distribution centres and 40% through independent distributors.
