Highlight Top Glove 3Q profit up 5.2% yoy, declares 7 sen dividend

by **Cals** Wed 18 Jun 2014, 03:10

Highlight Top Glove 3Q profit up 5.2% yoy, declares 7 sen dividend

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Tuesday, 17 June 2014 14:02

KUALA LUMPUR (June 17): Top Glove Corporation Bhd said its net profit for third quarter to end-May 2014 rose 5.2% year- on-year to RM42.37 million, up from RM40.27 million in the similar quarter a year ago.

“This increase in profit was due to aggressive cost-discipline and cost-optimisation practices, via continuous automation,” said the world’s top glove maker in a press statement.

Lower raw material prices and stronger US dollar vs ringgit also helped, it added.

But revenue for the third quarter fell to RM574.00 million, from RM604.08 million, due to lower average selling prices of gloves from declining raw material prices.

The group declared an interim dividend of seven sen per share, payable on July 17, 2014.

For the nine months to May 2014, total profits fell to RM134.20 million from RM148.08 million in previous nine months. Total revenue also fell to RM1.70 billion from RM1.77 billion.
Commenting on the company’s performance, Top Glove's chairman Tan Sri Lim Wee Chai said in a statemnet: “We are pleased to see an improvement in profit… even in the face of stiffer competition.

“This indicates that our initiatives to increase quality, automation and efficiency have been fruitful, and also speaks of a sustained demand for rubber gloves, both of which augur well for our future earnings and profitabililty.”

He said expansion plans for the group are very much on course, with an additional six nitrile glove lines at Factory 27 in Lukut, Port Dickson coming onstream by August 2014.

The construction of new glove production lines at Factory 29 in Klang is also well underway and targeted to be completed by December 2014. This will boost the number of production lines from 464 to 484 and increase production capacity from 42 billion to 44 billion pieces of gloves per annum.

Lim added the group maintained a net cash position of RM184.4 million and a healthy balance sheet as at 31 May 2014.

The group has also successfully completed the privatisation of Medi-Flex Limited and reached an amicable settlement of the legal suit pertaining to the alleged patent infringement.

The disposal of the loss-making Factory 8 in Zhangjiagang, China was completed on 13 June 2014.

“This consolidation exercise was part of the group’s on-going cost rationalisation and business streamlining strategy to enhance efficiency, and its remaining Factory 15 in Xinhua, China is expected to contribute positively to operations going forward,” said Top Glove’s press statement.

On outlook of the glove sector, Lim said: “We expect the glove business environment to continue to be challenging.

“However, with our unwavering focus on quality, innovation, automation, prudent cost control and efficiency across all aspects of our operations, we are well-positioned to capitalise on the industry’s robust growth momentum and maintain a strong performance in the quarters ahead”.