KUALA LUMPUR: Supermax Corporation Bhd
’s net loss widened to RM175.03 million in the financial year ended June 30, 2024 (FY2024) from RM140.86 million a year ago.
Revenue was sharply lower at RM646.17 million from RM821.09 million in FY2023.
In a Bursa Malaysia filing today, Supermax said that the fourth quarter (4Q) recorded a net loss of RM127.93 million from a net profit of RM1.41 million in the previous corresponding period.
It attributed the losses to several one-off charges, including impairment of plant and machinery, factory equipment, mould and tools at an old plant, which has stopped production during 4Q, amounting to RM27.1 million; and provision for old and obsolete stock of packaging materials and certain down-graded glove inventory at the old plants amounting to RM3.3 million.
It also saw a write-down of high-price inventory at an overseas subsidiary amounting to RM72.85 million in 4Q; pre-operating expenses of the new US plant; additional tax charged at certain manufacturing units for prior years charges amounting to RM30.8 million; and unrealised foreign exchange losses amounting to RM9.9 million.
Revenue during the 4Q quarter was lower at RM179.64 million versus RM222.60 million as the market is still recovering from the demand and supply imbalance due to an oversupply of gloves in the past, it noted.
Supermax said the group continues to execute low-price contracts for two years at certain distribution and manufacturing units from 1Q FY2023 to 4Q FY2024.
The glove maker said the rubber glove market is experiencing a mild recovery as the demand for medical and surgical rubber gloves picked up in March despite the prevailing oversupply situation, which is expected to be in equilibrium by 2025.
It said the uptick in demand was due to customers replenishing their stock as the stock purchased during the pandemic is expiring or has expired.
"With demand on an uptrend, prices are also set to rise but have yet to normalise,” it said.
Supermax said that orders from customers are gradually increasing but still at low market prices for the group.
In line with the impending recovery in demand, Supermax said that it is gradually ramping up production capacity, and the plan to build six new modern and more efficient manufacturing blocks is still in place, with production lines being installed gradually at a pace that takes into account the current and expected market conditions.
"As the group refreshes more of its production capacity by investing in automation technology when replacing old lines with newer high-capacity high-efficiency lines which will serve to minimise costs and reduce reliance on foreign workers, expect to see Supermax continuing to put itself in a strong position to take advantage when the glove market regains its vibrancy in 2025,” it added. - Bernama
