Top Glove Q3 profit soars almost six times to $655m

A worker in a Top Glove factory in Shah Alam, Malaysia, last year. The firm's strong third-quarter performance was mainly due to technological advancements and research and development, it noted in a filing.
A worker in a Top Glove factory in Shah Alam, Malaysia, last year. The firm's strong third-quarter performance was mainly due to technological advancements and research and development, it noted in a filing.PHOTO: AGENCE FRANCE-PRESSE

Malaysia's Top Glove posted a net profit of RM2.04 billion (S$655 million) for the third quarter ended May 31, almost six times the amount of RM347.9 million in the previous year, though it saw easing quarter on quarter.

At a briefing following the announcement of its results, the company also said it would delay its Hong Kong initial public offering for a few months following the United States ban on its gloves over issues of forced labour.

The robust performance was mainly due to technological advancements and research and development, it noted in a filing on Wednesday.

Global demand remains resilient as glove usage continues to rise, driven by the pandemic, it added.

Earnings per share (EPS) stood at 25.44 sen for the third quarter, up from 4.39 sen a year ago, although the group noted that last year's EPS for the quarter had been adjusted to reflect the bonus issue of two for every one existing ordinary share that was completed on Sept 7 last year.

Sales revenue for the third quarter rose to RM4.16 billion, nearly 2.5 times the RM1.69 billion for the preceding year.

These uptrends came after adjustments to average selling prices that peaked in February, Top Glove said.

This came even as sales volume eased 4 per cent from the previous quarter, following a temporary halt in shipments to the US from Malaysia, in compliance with requirements of the US Customs and Border Protection.

Top Glove is currently working with the US authorities to resolve the matter, the company said on Wednesday, Bloomberg reported.

Chairman Lim Wee Chai said the move by the US was only temporary, while the Hong Kong listing was for the long term.

Top Glove announced in February that it hoped to raise RM7.7 billion in a Hong Kong listing.

In April, it downsized this to RM4.2 billion.

The board declared a third-quarter dividend of 18 sen per share, comprising a special dividend payout of 21 per cent of profits. This is on top of the 50 per cent payout ratio, as per the company's policy.

The dividend will be paid on July 7, after the June 23 ex-dividend date.

The latest dividend brings the total for the first nine months of FY2021 to 59.7 sen per share, five times that of FY2020's 11.8 sen.

The results came even as raw material prices saw a slight increase in the quarter.

Average natural latex concentrate costs rose by 8 per cent to RM6.31 per kg, while nitrile latex prices climbed marginally by 0.4 per cent to US$2.31 per kg quarter on quarter, Top Glove said.

However, the group expects to benefit from a downtrend in raw material prices going forward.

In its press statement, it also said it had declared 2021 The Year of ESG (environmental, social and governance) for the group, and was working towards transitioning to low-carbon glove manufacturing.

Shares of Top Glove listed on the Singapore Exchange closed at $1.59 yesterday, down 0.6 per cent.

THE BUSINESS TIMES

A version of this article appeared in the print edition of The Straits Times on June 11, 2021, with the headline 'Top Glove Q3 profit soars almost six times to $655m'. Subscribe