Top Glove profit soars 2,030% to $781 million on Covid-19 demand

Revenue rose 294 per cent to RM4.76 billion.
Revenue rose 294 per cent to RM4.76 billion.PHOTO: REUTERS

KUALA LUMPUR (REUTERS) - Malaysia’s Top Glove Corp on Wednesday (Dec 9) posted a more than 20-fold jump in first-quarter net profit, beating record earnings of three months ago thanks to high demand for gloves, efficiencies in production and higher selling prices.

This was despite rising raw material prices due to less favourable weather conditions and supply constraints.

Net profit for the September-November period grew 2,030 per cent to RM2.38 billion (S$781 million) from RM111.4 million a year ago, the world’s largest glove manufacturer said in a filing to Malaysia’s bourse.
Revenue rose 294 per cent to RM4.76 billion.

The performance was slightly below the RM2.48 billion estimate by one analyst polled by Refinitiv.
The manufacturer posted a record quarterly net profit of RM1.29 billion in the previous period, when it announced plans to list in Hong Kong next year.

“We have had a strong and healthy start to FY2021, which sets a positive tone for the rest of the year,” managing director Lee Kim Meow said in a statement.

Top Glove said higher sales orders, capacity building and productivity improvements would boost the group’s performance going forward.

Top Glove shut some of its factories in Malaysia in phases last month, after an outbreak that saw more than 5,000 of its workers test positive for Covid-19.

The company had said the temporary closures could lead to delivery delays and cut sales this financial year by about 3 per cent.

Even so, it remained optimistic in its outlook.

The company estimates that glove demand will grow by 20 per cent this year, 25 per cent next year and 15 per cent post-pandemic.

It was in a net cash position of RM3.45 billion at the end of November.

Top Glove's Singapore shares were trading unchanged at $2.32 at 2.33pm on Wednesday. Its Kuala Lumpur shares were down 10 sen at RM6.99.