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Malaysia's Top Glove posts record profit for fourth consecutive quarter after earnings jump 2,380%

Malaysia's Top Glove posts record profit for fourth consecutive quarter after earnings jump 2,380%

FILE PHOTO: A general view of Top Glove headquarters is pictured in Shah Alam, Malaysia Aug 11, 2020. (Reuters/Lim Huey Teng)

KUALA LUMPUR: Malaysia's Top Glove Corp posted a record profit for the fourth consecutive quarter in the December to February period as continued demand for gloves globally boosted sales, the company said on Tuesday (Mar 9).

Net profit soared 2,380 per cent to RM2.87 billion (US$695.93 million) in the second quarter of the financial year from RM115.7 million a year ago, it said in a filing to Malaysia's stock exchange.

The company said the profit achieved for the first half of the current financial year ending in August 2021 exceeded the group’s total profit for the past 20 years.

The world's largest medical gloves manufacturer has benefited from soaring demand for its medical gloves and protective gear during the COVID-19 pandemic, but a US import ban continues to cast a shadow on its stellar performance.

The company said greater production efficiency and higher average selling prices had boosted second-quarter profits, and expected demand to grow even as vaccination is rolled out.

READ: From record sales to government probe, 2020 an eventful year for Malaysia's Top Glove

"While demand is likely to stabilise post-pandemic, the Group expects it will not revert to pre-pandemic levels owing to increased hygiene awareness as well as uncertainties surrounding the resolution of the COVID-19 pandemic," the company said.

Top Glove also posted record revenue of RM5.37 billion in the second quarter, up 336 per cent from a year ago.

Global glove demand would likely grow to about 15 per cent per annum post-pandemic from around 10 per cent per annum before the coronavirus, Top Glove said, adding it expected governments to continue to stockpile gloves and other personal protective equipment.

The manufacturer, which is seeking a US$1.9 billion dual primary listing in Hong Kong, said a portion of the net proceeds raised will be invested in environmental, social and corporate governance practices and initiatives.

READ: Malaysia's Top Glove posts record quarterly profit on pandemic demand

Last July, the US Customs and Border Protection placed an import ban on Top Glove's subsidiaries on allegations of forced labour.

Sources told Reuters that two banks - Citigroup and UBS Group AG - have opted out of the listing deal, citing concerns about the manufacturer's rubber farming processes and the reputational risk of working with a US sanctioned company.

Source: Reuters/lk
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