KUALA LUMPUR: Shares in Supermax Corp Bhd
slipped about 3% on Bursa Malaysia following a disappointing earnings announcement that saw the glove maker's net losses widen to RM175.03mil.
At 9.27am, the company's stock was trading 2.5 sen or 3.05% lower at 79.5 sen after 3.51 million shares traded.
In a late-Wednesday stock filing, Supermax reported a 24.26% year-on-year increase in FY24 net loss, while revenue dove 21.3% to RM646.17mil.
In the fourth quarter (4QFY24) alone, the group posted a net loss of RM127.93mil, against a net profit of RM1.41mil in the previous corresponding period.
The group said revenue in 4QFY24 was lower at RM179.64mil versus RM222.6mil as the market was still recovering from the demand and supply imbalance due to an oversupply of gloves in the past.
Supermax attributed the losses to several one-off charges, including impairment of plant and machinery, factory equipment, mould and tools at an old plant, which stopped production in 4Q, amounting to RM27.1mil.
There was also a provision for old and obsolete stock of packaging materials and certain downgraded glove inventory at the old plants amounting to RM3.3mil.
Additionally, Supermax also wrote-down high-price inventory at an overseas subsidiary amounting to RM72.85mil in 4Q.
It said there were also pre-operating expenses at the new US plant, additional tax charged at certain manufacturing units for prior years charges amounting to RM30.8mil, and unrealised foreign exchange losses amounting to RM9.9mil.
In its results review, TA Securities Research said Supermax's FY24 results missed expectations due to the higher-than-expected operating expenses.
However, it expects the glove maker to make a turnaround in FY25 given the improvement in demand due to stock replenishment activities and the group's cost rationalisation.
"Meanwhile, we believe the average selling price (ASP) would remain flattish due to the prevailing oversupply situation and competition from China," it said.
TA Securities maintained its "buy" recommendation with a target price of 92 sen a share.
