Top Glove Q4 loss widens to $134 million due to impairment
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The Malaysian glove manufacturer's loss per share for Q4 was 5.78 sen.
PHOTO: BLOOMBERG
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SINGAPORE - Singapore-listed Top Glove posted a net loss of RM463.1 million (S$134 million) for the fourth quarter ended August, widening from its RM63 million net loss the previous year.
The Malaysian glove manufacturer, whose profits and sales soared during the Covid-19 pandemic, was hit by lower revenue and a RM388.5 million impairment over the quarter.
This translated to a loss per share (LPS) of 5.78 sen, compared with the previous year’s loss of 0.79 sen per share.
The impairment, which had no impact on the group’s cash flow, comprised a goodwill impairment of RM138 million as well as an impairment and write-off of property, plant and equipment amounting to RM251 million.
It resulted from an operational rationalisation exercise and a review of the group’s income-generating assets to strengthen its cost competitiveness, said Top Glove in its results filing on Friday.
Revenue for the fourth quarter tumbled 52 per cent year on year to RM476 million, from RM990 million in the fourth quarter of financial year 2022.
Notwithstanding the impairment, Top Glove said its quarterly performance would have improved with a narrower loss after tax of about RM65 million.
Top Glove managing director Lim Cheong Guan said the underlying improvement for the fourth quarter is “encouraging against the uncertain environment, which continues to impact the glove industry”.
“Looking ahead, the group believes that inventory build-up from the pandemic is very close to bottoming out, following lower glove demand over the past two years. Conversely, glove consumption has increased post-pandemic on the back of elevated levels of hygiene and health awareness,” he said.
“With this, we believe that glove demand will pick up gradually going forward.”
The latest quarter’s results brought Top Glove’s net loss for FY2023 to RM926.6 million, a reversal from its net profit of RM225.6 million in FY2022.
Revenue for the full year declined 59 per cent to RM2.3 billion from RM5.6 billion the previous year. FY2023 LPS was 11.57 sen; in FY2022, the company reported earnings per share of 2.82 sen.
Top Glove said it will focus on improving the performance of its core glove business, particularly through quality and cost enhancement initiatives, as well as innovation.
The group said it maintains a positive industry outlook as it believes the sector’s mid- to long-term prospects remain promising.
“We are already seeing an uptick in sales volume month to month, which indicates our customers’ glove inventory is close to being depleted. As the oversupply situation also continues to ease, we look forward to seeing global glove demand resuming its projected 8 per cent to 10 per cent growth per annum eventually, and better times ahead.”
Top Glove shares closed 2.2 per cent lower at 22 cents on Friday. THE BUSINESS TIMES
