Top Glove Corporation Bhd achieved a pre-tax profit of RM38.389 million on the back of a turnover of RM1.464 billion for the third quarter ending 31st May 2022 from a pre-tax profit of RM2.603 billion on the back of a turnover of RM4.162 billion for the same period previously.
For the nine months ended 31 May 2022, it achieved a pre-tax profit of RM409.508 million on the back of a turnover of RM4.498 billion from a pre-tax profit of RM9.413 billion on the back of a turnover of RM14.286 billion previously
Top Glove said that against a highly challenging backdrop, the Group achieved a 6% improvement in Sales Volume compared with the preceding quarter, attributed mainly to the recovery in sales to the USA from Malaysia as well as other regions.
It said that the softer performance occurred amidst a convergence of headwinds, with production costs moving upward due to global inflation and as the Russia Ukraine conflict drove up crude oil prices. Additionally, the Group contended with increases in natural gas and electricity tariffs, as well as minimum wage implementation which came into effect 1 May 2022.
It said that the escalating costs resulted in margin compression, as the Group was unable to fully pass costs through amidst the ongoing oversupply situation.
“However, average selling prices (ASPs) are declining at a far slower pace which will help cushion the cost impact going forward. Meanwhile, sales to the USA from Malaysia continue to trend higher in 3QFY2022, increasing by 8% compared with 2QFY2022, with great potential for further growth, which bodes well for the Group, “Top Glove said. It added that for 3QFY2022, the average natural latex concentrate price rose 17% quarter on quarter to RM6.50/kg. Meanwhile, the average nitrile latex price was USD1.11/kg, 3% lower compared to 2QFY2022.
Commenting on the Group’s results, Dato’ Lee Kim Meow, Managing Director of Top Glove said, “This is an extremely challenging time for the glove industry and this quarter’s results are not reflective of our usual business performance, owing to the ongoing normalisation trend coupled demand-supply imbalance.
However, we will press on and continue focusing on the fundamentals: delivering quality products at an efficient cost, a direction that remains our priority both in good and lean times. On this note, I also wish to express our profound appreciation to our people who have worked hard with a quality mindset, which will continue to move us forward through this difficult period.”
Top Glove expects the challenging business environment to persist in the near term but emphasises the situation is a temporary setback. Expressing optimism about prospects both for the Group and the sector, Dato’ Lee remarked, “In business, we always take a long-term view. Top Glove believes that the outlook for the glove industry is still promising as gloves remain an essential item in the healthcare sector. We are very confident that demand will keep growing with increased usage from emerging markets where the glove consumption base is relatively low, coupled with higher levels of hygiene and health consciousness in a post-pandemic era”.
Top Glove is currently the world’s largest manufacturer of gloves with an established corporate culture and good business direction of producing consistently high quality, cost-efficient gloves. Top Glove has over 2,000 customers worldwide and exports to more than 195 countries.