Supermax 2Q earnings dn 50.6% to RM22.64m

KUALA LUMPUR: Glove maker Supermax Corp Bhd saw its earnings slip 50.6% to RM22.64 million in the second quarter ended June 30 from RM45.85 million a year ago as profit margins were eroded owing to continuously high volatility in latex prices and unfavourable exchange rates

It said on Monday, Aug 22 revenue dipped 1.3% to RM237.92 million from RM234.82 million while earnings per share were 6.66 sen compared with 13.51 sen. It did not declare any dividends unlike a year ago when it paid out 2.5 sen a share.

For the first half, its net profit slumped 51.7% to RM46.96 million from RM97.33 million in the previous corresponding period but its revenue was 5.2% higher at RM479.29 million compared with RM455.47 million.

Its cash and cash balances rose to RM155.23 million from RM83.18 million.

When compared with the first quarter, Supermax said persistently high volatility in latex costs and weak US dollar continued to weigh heavily on the rubber glove industry.

“Nevertheless, the management’s measures to tackle these headwinds have mitigated their effects. Glove prices are adjusted on a regular basis to pass through the cost increases albeit with some time-lag while cost-cutting measures are also being put in place,” it said.

Supermax said latex prices were already off the recent high of RM10.87 per kg wet on April 7, 2011 and going forward, Supermax expected it to retreat further. As at Aug 17, the price of bulk latex was RM8.53 per kg/wet.