Top Glove Corporation Bhd reported its Q2 performance with results largely remaining flattish against 1QFY2023, with Sales Revenue of RM618 million and Loss After Tax of RM155 million, the group, however, did see an improvement in Sales
Volume (Quantity Sold) as compared with the preceding quarter.
On a half-yearly basis, 1HFY2023 Sales Revenue amounted to RM1.25 billion with Loss After Tax of RM313 million. Top Glove said it continues to be impacted by headwinds that have weighed heavily on the glove industry. Destocking activity persisted, driven by excess customer inventory, resulting in a softer order book. Aggravating the situation was the ongoing glove oversupply situation, combined with a lack of customer urgency to place orders in light of shorter delivery times from lower manufacturer utilisation. Meanwhile, rising production costs which the Group was unable to share out with customers owing to moderating ASPs, also contributed to the muted financial results.
The Group notes that customers’ glove inventory levels are moving closer to normality. However, while sales have started to pick up, not all orders received will prove feasible due to lower price points. As the glove industry faces losses coupled with escalating costs, the industry has started to revise selling prices upward from February 2023, which is a necessary step towards the industry’s eventual recovery and sustainability.
The challenging and competitive business landscape is expected to endure through 2023 is said, however, the Group takes a long-term view of industry prospects, which are still promising. Lim Cheong Guan, Managing Director asserted, “We are under no illusion and remain mindful that the market will continue to equilibrate in the near term. Nonetheless, we believe that the glove industry will recover in due course as its fundamentals remain robust and unchanged.”
