TOP Glove recorded a net loss of RM3.6 million (S$1.1 million) for the fourth quarter ended Aug 31, narrowing from its RM461.7 million net loss the previous year.
The glove manufacturer on Thursday (Oct 10) said its losses shrunk on higher sales volume as customers continued to replenish glove inventories, leading to higher utilisation rates and enhanced cost efficiency.
This translated to a loss per share of 0.04 sen compared with last year’s loss of 5.76 sen per share.
Revenue for the fourth quarter was 75 per cent higher year on year at RM835.3 million, up from RM476 million in Q4 of FY2023.
This was due to Q4 of FY2024 seeing a 91 per cent surge in sales volume compared with the same period last year.
Top Glove saw especially strong growth from the US where sales volume soared 120 per cent quarter on quarter, driven by a high number foreign manufacturers’ gloves being placed on the US Food and Drug Administration’s import alert list.
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Moreover, the company anticipates greater sales volume growth in the coming quarters as US tariffs on China-made medical gloves are set to kick in.
On Sep 13, the United States Trade Representative decided it would raise tariffs for China-made medical and surgical gloves to 50 per cent by 2025 and 100 per cent by 2026 for its final tariff revision.
No dividends were proposed by the board of directors for the quarter under review. Net dividends per share were last recorded as 1.20 sen for 2022.
This brings full year revenue to RM2.5 billion up by around 11 per cent from FY2023’s RM2.3 billion revenue.
Full year losses have fallen 93 per cent to 62 million compared with 925 million for FY2023.
Top Glove also announced that it is proposing a bonus issue of up to 405,964,951 warrants on the basis of one warrant for every 20 existing ordinary shares.
Through the proposed bonus issue of warrants aims, the glove manufacturer said it aims to reward shareholders by enabling them to own warrants which are tradable on Bursa Securities without incurring any cost.
It also said it aims to give shareholders the opportunity to further increase their equity participation in the company through the exercise of the warrants at a pre-determined price.
This will also strengthen Top Glove’s capital base by increasing the size of its shareholders’ funds pursuant to the exercise of the warrants while enabling it to raise additional funds for its working capital requirements and capital expenditure.
The warrants will be issued at no cost to entitled shareholders and the exercise price will be determined by the board at a later date.
For illustrative purposes, assuming the exercise price of the warrants is set at RM1.09 per warrant – a premium of 19.4 per cent to the volume weighted average market price of Top Glove shares for the last five trading days – the company could rake in gross profits of up to RM442.5 million from the exercise of the warrants.
Some RM300 million of the profits will fund the construction of new glove factories and the refurbishment of existing factories, while the remainder will be used for working capital requirements.
Shares of Top Glove last closed up 1.5 per cent or S$0.005 at S$0.33 on Thursday before a trading halt was called at 12.30 pm, ahead of its earnings announcement. The trading halt was lifted at 2 pm.
