KUALA LUMPUR: Kossan Rubber Industries Bhd
expects the glove industry to face a persistent supply-demand imbalance throughout FY2024, compounded by the pressure on average selling prices (ASP) from international competitors.
“The challenging operating conditions will be further impacted by rising costs of raw materials and natural gas. Moreover, the ongoing global logistics disruptions and container shortages, particularly due to the Red Sea Crisis, will continue to impact glove shipments,” the glovemaker said in a filing with Bursa Malaysia.
Nevertheless, Kossan said the long-term outlook for glove demand remained positive.
It noted that the industry consolidation and capacity adjustments by key domestic players, along with the exit of new entrants in the pandemic period, have collectively helped to alleviate the oversupply situation.
“The technical rubber products (TRP) division expects some project delays in the infrastructure segment during the second half of FY24. However, with the positive outlook in the automotive segment, this division is anticipated to achieve a satisfactory performance for FY24.
“Despite the challenging landscape, the group remains cautiously optimistic about its performance for FY24,” Kossan said.
In the second quarter ended June 30, the glove manufacturer posted a net profit of RM31.3mil, or earnings per share of 1.23 sen compared with a net loss of RM3.3mil, or loss per share of 0.13 sen in the same corresponding quarter last year.
Revenue rose to RM429.9mil from RM387.5mil last year.
For the first half, it posted a net profit of RM62.9mil compared with a net loss of RM27.5mil while revenue rose 12.7% to RM881.5mil versus RM782.2mil a year ago.
