2 weeks ago
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PETALING JAYA: Top Glove Corp Bhd’s net profit in its first quarter ended Nov 30, 2020 surged to RM2.38 billion, over a twentyfold increase from RM111.43 million in the same quarter of the previous year, attributed to higher sales output, utilisation levels, production efficiency as well as higher average selling prices (ASPs) in line with market pricing.
For the period, its revenue almost quadrupled to RM4.76 billion from RM1.21 billion previously.
According to its Bursa filing, the group saw the uptrend in raw material prices continue, as that for natural latex concentrate increased 13% to an average of RM5.14 a kg and nitrile latex jumped 39% to an average of US$1.31 a kg from the previous quarter, driven by less favourable weather conditions and supply constraints, against a backdrop of increased glove demand.
Given the strong global demand for gloves which is estimated to grow from a pre-pandemic level of about 10% a year to about 15% a year in the post-pandemic era, it has earmarked RM10 billion for capital expenditure over the next five years from FY2021 to FY2025, which will increase capacity by an additional 100 billion pieces of gloves.
Top Glove’s managing director, Datuk Lee Kim Meow, commented that it has had a strong and healthy start to FY2021, setting a positive tone for the rest of the year.
Despite the challenging and competitive landscape it maintains an optimistic outlook on prospects.
With the pandemic, the group estimates that glove demand will keep growing, by 20% a year in 2020, 25% a year in 2021 and 15% a year post-pandemic.
The steady increase in sales orders across the world, alongside capacity building plans and technology-driven quality, productivity and efficiency improvements, bode well for its future performance.
for the quarter, Top Glove has announced a total dividend payout of 16.5 sen including a 6% special dividend, which translates into a total dividend payout ratio of 56%.
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