Top Glove posts lower Q1 net profit

PETALING JAYA (Dec 18, 2013): Top Glove Corporation Bhd, the world’s largest rubber glove manufacturer, saw its first quarter net profit fall by 12.5%, due to a lower average selling price and unfavourable contributions from its China operations.

Net profit for the quarter ended Nov 30, 2013 stood at RM50.28 million compared to RM57.49 million from a year ago.
Revenue dropped 1.8% to RM573.99 million for the quarter, from RM584.58 million the year before.

This was despite a year-on-year increase in volume of 10%, mainly driven by nitrile gloves, which saw a 37% growth.
The growth in volume was attributed to unabating demand from developed and emerging markets, Top Glove said in a press statement yesterday.

Raw material prices persisted in their downward trend in Q1FY14 compared with the fourth quarter ended Aug 31, 2013.
Top Glove chairman Tan Sri Lim Wee Chai said despite modest overall growth in Q1FY14, the group has started the financial year on a positive note and is determined to improve its performance in the coming quarters.

Moving forward, Top Glove said the group will be facing a challenging and competitive business environment, particularly with the electricity tariff hike of 16.85%, which comes into effect on Jan 1, 2014.

“We appeal to the government to reduce the increase of 16.85% to 8%. Meanwhile, the group will continue to identify ways to reduce energy costs in the production process to better manage the tariff hike,” it said in the statement.