Kossan Rubber sees drop in Q2 profit

Kossan Rubber Industries Bhd's pre-tax profit for the second quarter ended June 30, 2011 dropped to RM26.648 million from RM36.253 million in the corresponding quarter last year.

The rubber gloves manufacturer's revenue for the quarter rose to RM275.610 million from RM256.495 million previously.

For the half year, its pre-tax profit dropped to RM54.552 million from RM75.039 million in the corresponding period last year on revenues of RM532.956 million and RM519.263 million respectively.

In a filing with Bursa Malaysia, it said the higher turnover was partly due to higher selling price, while high cost of natural rubber latex resulted in tje lower pre-tax profit.

The level of turnover in the second quarter was within management expectations, it said. Pre-tax profit margin dropped from 10.88 per cent in the second quarter last year to 9.67 per cent in the second quarter this year mainly due to competitive market, it added.

On prospects, it said global demand for gloves remained strong and vibrant and with more manpower available, the management was confident of higher capacity utilisation in the gloves division. A better performance is expected in the second half of the financial year, it added.--Bernama