Top Glove's net profit up 51.4% in Q3 on robust demand

Stronger demand helped drive earnings higher at rubber glove manufacturer Top Glove, it announced yesterday.

Third-quarter net profit rose 51.4 per cent to RM117.6 million (S$40 million), while revenue rose 26.6 per cent to RM1.1 billion for the three months to May 31.

This translated to earnings per share of 9.36 sen, from 6.20 sen a year earlier. Sales volume rose by a "record high" of 37 per cent from the third quarter last year.

The group has declared an interim dividend of seven sen, to be paid out on July 17, compared with a dividend of six sen in the previous year.

The board has also proposed to undertake a bonus issue on the basis of one bonus share for every existing Top Glove share held, subject to shareholder approval at an extraordinary general meeting to be convened.

Net profit rose 41.8 per cent to RM332 million for the nine months, while revenue was up 19.6 per cent to RM3 billion.

Stronger earnings stemmed from higher demand, particularly from Asia, Eastern Europe and Latin America. Growth in demand from India, China and Vietnam more than doubled on a nine-month basis.

  • AT A GLANCE

  • REVENUE: RM1.1 billion (+26.6%)

    NET PROFIT: RM117.6 million (+51.4%)

    INTERIM DIVIDEND PER SHARE: Seven sen (+16.7%)

The more robust demand led to better cost efficiencies with a higher utilisation rate.

Top Glove also attributed its better performance to its focus on cost-improvement initiatives and technological advances. Still, these were offset by an increase in the natural gas tariff and additional wage costs, it said.

While it expects the operating environment to be challenging, it remains upbeat on its outlook as it has a "healthy working capital position".

Top Glove will continue to expand manufacturing capabilities, organically as well as through mergers and acquisitions or joint ventures.

Last month, it completed its RM2.85 million acquisition of Duramedical, a company manufacturing dental hygiene products, representing a diversification into medical-related products.

Top Glove has 39 factories and about 17,000 employees. Its shares closed up one cent to $3.88 yesterday after the results were released.

A version of this article appeared in the print edition of The Straits Times on June 20, 2018, with the headline 'Top Glove's net profit up 51.4% in Q3 on robust demand'. Print Edition | Subscribe