GLOVE manufacturer Top Glove posted a net profit of RM5.5 million (S$1.7 million) for the first fiscal quarter ended November, reversing its net loss of RM57.7 million in the previous corresponding period.
This translates to an earnings per share of 0.07 sen compared with the previous year’s loss of 0.72 sen per share.
On Friday (Dec 20), Top Glove said that the improvement in its bottom line came amid higher sales volume and healthier margins from continual glove-replenishment activity.
The increased inflows of US orders ahead of the 50 per cent tariff on glove imports from China contributed to sales volume, added the company.
Its ongoing quality-enhancement and cost-optimisation initiatives, as well as the strengthening of the US dollar against the ringgit, also contributed to its improved financials.
Top Glove revised its average selling prices upward in August and September this year, following higher costs of raw materials and a weaker US dollar in the fourth quarter of FY2024.
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The effects arising from the price adjustments came in only towards the end of Q1 FY2025, and the full impact is expected to be reflected in the next quarter, noted the company.
No dividend was declared for the period under review – unchanged from a year earlier.
Revenue for Q1 FY2025 rose 79.5 per cent to RM885.9 million, from RM493.5 million in the year-ago period.
Operating expenses rose 59.8 per cent on the year to RM883.6 million, from RM553 million.
Top Glove is optimistic about the recovery of the glove industry, and expects orders to continue flowing in. Demand will also be spurred by the increased health and hygiene awareness following the Covid-19 pandemic, it noted.
The company added that it is well-positioned to benefit from trade diversions resulting from US tariffs on China-produced gloves. It expects the effects of those tariffs to be “felt more substantially from Q2 FY2025 onwards”.
It said: “The group will proactively diversify risks across its countries of operations in Malaysia, Thailand and Vietnam to mitigate the geopolitical situation which continues to escalate and remain unpredictable.”
Shares of Top Glove were trading down 1.2 per cent or S$0.005 at S$0.415 on the Singapore bourse, after the company, at 1.21 pm, called for a trading halt to be lifted.
