[UPDATED] Top Glove records RM73 mil drop in net profit in Q3 2022

KUALA LUMPUR – The world’s largest glove maker Top Glove Corp Bhd saw a significant drop in net profit in its third quarter (Q3) ended May 31, recording RM29 million compared with RM102 million in its previous quarter.

In a statement, the company revealed that it posted a Q3 sales revenue of RM1.47 billion and profit after tax of RM29 million.

It added that the group achieved a 6% improvement in sales volume compared with the preceding quarter, attributed mainly to the recovery in sales to the US from Malaysia, as well as other regions. 

The company also attributed the soft performance to the convergence of headwinds, with increasing production costs due to global inflation, the rise in crude oil prices caused by the Russia-Ukraine conflict, increases in natural gas and electricity tariffs, and the minimum wage implementation from May 1 onwards all factors.

“Meanwhile, sales to the US from Malaysia continue to trend higher in 3QFY2022, increasing by 8% compared with 2QFY2022, with great potential for further growth, which bodes well for the group. 

“For 3QFY2022, the average natural latex concentrate price rose 17% quarter-on-quarter to RM6.50 per kg. Meanwhile, the average nitrile latex price was US$1.11 (RM4.84) per kg, 3% lower compared to 2QFY2022.” 

For 9MFY2022, the group posted sales revenue of RM4.50 billion and net profit of RM334 million.

On the quarterly results, managing director Datuk Lee Kim Meow said: “This is an extremely challenging time for the glove industry and this quarter’s results are not reflective of our usual business performance, owing to the ongoing normalisation trend coupled with demand supply imbalance.”

“As external factors are beyond our control, we continue to focus on internal factors, the most fundamental of which is staying fit and healthy, so that we remain sustainable through the toughest of times. This will enable us to prepare for better times ahead.”

Also, by FY2025, Top Glove has committed to setting a target year to achieve its net-zero carbon aspirations and aims to attain 70% traceability to natural rubber plantations.

In March, Top Glove saw a drop in net profit after recording RM102 million in its second quarter this year ended February 28, compared with RM185.72 million in its first quarter. – The Vibes, June 9, 2022