Top Glove Corp Bhd managing director Lim Cheong Guan.
KUALA LUMPUR: Top Glove Corp Bhd
, which returned to profitability in the first quarter of its financial year (1QFY25), remains optimistic about its outlook, with orders continuing to flow in as the glove industry steadily recovers.
The glovemaker’s strong focus on operational excellence, combined with robust industry fundamentals and heightened health and hygiene awareness post-pandemic, is expected to drive sustained demand growth.
Additionally, Top Glove is well-positioned to benefit from trade diversions resulting from U.S. tariffs on China-produced gloves, creating new opportunities in key markets.
The impact of these changes is expected to be felt more substantially from 2QFY25 onwards.
“In this regard, the group will proactively diversify risks across its countries of operations in Malaysia, Thailand and Vietnam to mitigate the geopolitical situation which continues to escalate and remain unpredictable.
“Aligning with its drive for long-term growth and success, the group will also continue to integrate sustainable practices into every aspect of its operations. With its recovery realised, the group is poised to sustain its upward momentum and deliver increasingly stronger results in the coming quarters,” Top Glove said in a statement.
Top Glove posted a net profit of RM5.47mil, or earnings per share of 0.07 sen in 1QFY25 compared with a net loss of RM57.7mil, or loss per share of 0.72 sen posted in the year-ago quarter.
Revenue for the quarter surged 79.5% to RM885.9mil against RM493.4mil last year.
The group’s rebound was fuelled by robust and continual order inflows, driving a higher utilisation rate of 66% across running factories, while enhancing cost efficiencies
Additionally, the strengthening of the US dollar against the ringgit during the quarter in review helped to improve margins.
Managing director Lim Cheong Guan said that the spike in profitability in 1QFY25 is commendable, but more importantly, it signals the start of an exciting journey to restore Top Glove to its former greatness.
“We are highly encouraged by the steady inflow of orders and the opportunities arising from shifting global trade dynamics. These trends, coupled with our quality and cost-efficiency initiatives, position us well for accelerated growth towards reestablishing our leadership position.
“As we move forward strongly, we remain steadfast in delivering value to our stakeholders and seizing the opportunities ahead, with every confidence that the best is yet to come,” Lim said in the statement.
Top Glove had in August and September 2024 revised its average selling prices (ASPs) upward, following higher raw material costs and a weaker US dollar in 4QFY2024.
The effects of these price adjustments came in only towards the end of 1QFY25, with the full impact expected to be reflected in 2QFY25.
Raw material prices remained mixed quarter on quarter, with average natural latex concentrate prices increasing by 4% to RM6.88/kg, while average nitrile latex prices were down 3% to USD0.94/kg.
