In its latest quarterly financial results released today, Rubberex and its subsidiary companies posted a net profit of RM 2 million, backed by revenue of RM46.4 million for the quarter ended June 30th, 2022. Compared to its preceding quarter before this, profit after tax had decreased by 23.1% from RM2.6 million recorded in the first quarter of 2022. Cumulatively, the Group achieved RM4.6 million in net profits for the first half of this year, a sharp decline of RM151.2 million or 97.0% from just over a year ago.
Similar to other glove makers, the results came as no surprise as the industry is presently facing intense competition amidst severe and persistent over-supply of gloves in the market. Group Managing Director, Mr. Khoo Chin Leng, explains, “As global vaccination rates improve over time and the usage of gloves becomes more mainstream, over-supply and declining average glove selling prices (ASP) are inevitable. While lower capacity utilization and sales volumes were seen from our nitrile disposable glove division, demand for the Group’s other products, specifically our general-purpose and industrial gloves, remain stable and profitable.”
Rubberex’s filing nevertheless indicated that the Group remains focused on its nitrile disposable glove division where glove consumption is expected to stabilize in the long run. Echoing the resilience of the healthcare industry, Mr. Khoo adds that, “with significant improvements seen in health and safety standards worldwide, we believe the demand for gloves will persevere.”
In a related development today, Rubberex also released its Circular seeking shareholders’ approval for multiple proposals earlier announced on May 31 on the acquisition of medical test kit manufacturer, Reszon Diagnostics International Sdn Bhd, diversification into the healthcare business, and subsequent change of name to Hextar Healthcare Berhad. Owner and sole largest shareholder of Rubberex, Dato’ Eddie Ong Choo Meng is supportive of the Group’s latest ventures and believes that the healthcare business will contribute significantly to the future growth and value of Rubberex. While Dato’ Eddie re-affirms his support and commitment to the Group’s core glove business, he adds, “Notwithstanding our foray into property investments earlier, the move to diversify into a profitable business in a growing sector with huge potential is in line with the Group’s long-term strategy of delivering sustainable growth and returns to our shareholders.”
