Top Glove Corporation Bhd reported profit attributable to owners of the parent of 30.8 million Malaysian ringgit for the quarter ended Feb 28, up 3 per cent year-on-year, as a 57 per cent jump in glove sales volume offset weaker prices and currency headwinds.
Second-quarter revenue increased 14 per cent YoY to 1.01 billion ringgit, supported by recovering demand, especially from European customers. Basic and diluted earnings per share were unchanged at 0.38 sen.
Pre-tax profit fell 32 per cent YoY to 38.5 million ringgit, while profit before interest and tax slipped 18 per cent to 46.3 million ringgit. Operating profit contracted 23 per cent to 33.8 million ringgit as average selling prices (ASPs) declined in tandem with lower raw-material costs. No dividend was declared for the quarter.
By geography, Malaysia remained the biggest contributor in the first half, booking 1.61 billion ringgit in external sales and 89.8 million ringgit in segment profit. Operations in Thailand and Vietnam delivered 184.4 million ringgit and 31.7 million ringgit in sales respectively, while other markets contributed 63.9 million ringgit. Group finance costs rose sharply to 17.6 million ringgit from 3.2 million ringgit a year earlier following the issuance of a senior sukuk.
Management attributed the volume-led topline growth to regained market share in Europe and higher plant utilisation, which reached 89 per cent during the quarter, improving cost efficiency. However, a sharp mid-quarter weakening of the U.S. dollar against the ringgit constrained margins despite the group’s hedging programme. Natural rubber latex concentrate and nitrile latex prices eased 3 per cent and 2 per cent quarter-on-quarter, providing partial relief.
On strategy, Top Glove said it will maintain its focus on quality enhancements and cost-optimisation to capture anticipated growth in global glove demand. The company is monitoring Middle East geopolitical tensions that could disrupt nitrile latex supply and is leveraging its ability to switch between nitrile and natural-rubber production lines, alongside diversified sourcing and logistics arrangements, to mitigate potential shortages.
Managing Director Lim Cheong Guan noted that higher volumes and operational discipline underpinned the quarter’s earnings resilience, while Executive Chairman Tan Sri Dr Lim Wee Chai said the group would keep strengthening efficiency and service levels to navigate currency volatility and geopolitical uncertainties.
Top Glove’s healthy liquidity was recently affirmed by MARC Ratings, which maintained an “AA-” rating with a stable outlook on the group’s senior sukuk programme.