Supermax Group recorded financial losses for the first time. Revenue for the current quarter ended 31 December 2022 amounted to RM 174.8 million, a contraction of 66.6% (RM 348.8 million) compared to revenue of RM 523.5 million recorded in the corresponding quarter a year ago. The adverse market conditions have led to the Group recording significant losses at operating, EBITDA, pre-tax and after-tax levels.
The fall into a loss-making position was made worse by a weakening of the USD against the MYR which lead to significant unrealised forex losses the group said, in a Bursa filing. Among the reasons were Average selling prices (ASPs) continuing to slide lower in the face of intense market competition. Sales continue to be adversely impacted as the Withhold Release Order (WRO) imposed by the US Customs and Border Protection (USCBP) in October 2021 remains in place, effectively hampering efforts to import new lower-cost shipments to average down inventory costs.
Broader global market demand is slow as a result of overstocking during the peak pandemic times. Increased operating costs including high energy costs and increase in minimum wages. Incurring pre-operating expenses for new US plant. Decommissioning of certain older plants which are in the process of rebuilding.
Compared to the preceding quarter, the Group’s revenue was lower by 29.5%, while profitability fell into the red as well.
Significant unrealised forex losses amounting to RM 55.2 million compared to unrealised forex gains of RM 32.7 million in the previous quarter.
On the outlook, Supermax expects to see the rubber glove industry continuing to consolidate with ASPs and demand continuing to moderate from record highs. In the foreseeable future, the market will remain weak, competition continues to be intense and profitability is adversely impacted
