Malaysia's Top Glove Q4 earnings plunge 48% on slower sales

Top Glove recorded a net profit of S$196.7 million during June-August.
Top Glove recorded a net profit of S$196.7 million during June-August.PHOTO: REUTERS

KUALA LUMPUR (REUTERS) - Malaysia's Top Glove Corp posted on Friday (Sept 17) a 48 per cent drop in its fourth-quarter earnings as the steady roll-out of Covid-19 vaccines worldwide pulled down the demand for gloves.

The world's largest medical glove maker recorded a net profit of RM607.9 million (S$196.7 million) during June-August, compared with RM1.17 billion a year ago, lagging behind the RM8.69 billion estimate by analysts in a Refinitiv poll.

Revenue slumped 32 per cent to RM2.11 billion, a stock exchange filing showed.

"(The quarterly) results were softer on the back of normalising demand following mass vaccine roll-out, leading to lower sales volume and (prices), which were not matched by a corresponding reduction in raw material prices," the manufacturer said in a statement.

A previous ban on imports to the United States also continued to hurt sales during the period. But the year-long ban, imposed on Top Glove for alleged forced labour abuses, was lifted last week.

The firm on Friday said the ban removal is expected to boost sales from its Malaysia operations to the US, which accounts for 15 per cent of the group total sales, but sees a challenging and competitive business environment.

Sales to the US is expected to fully normalise by December and shipments could commence as early as the end of September, said the dual-listed company.

Top Glove’s Singapore-listed shares closed at 99.5 cents on Friday, down 7.5 cents or 7 per cent.