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KUALA LUMPUR (October 27): Supermax Corp Bhd today posted a record quarterly net profit of RM789.52 million, almost 32 times more than RM24.75 million a year ago, thanks to continued and growing demand for gloves rubber in the middle of the Covid-19 pandemic.
The glove maker’s excellent earnings for its first quarter ending September 30, 2020 came as revenue increased 265.6% to RM1.35 billion, up from RM369.94 million a year ago.
The group attributed the stellar earnings growth to higher average glove sales prices and continued strong demand for gloves.
“Supermax’s already solid financial position has been dramatically strengthened, especially to a net cash position with cash and bank balances amounting to RM2.36 billion as of September 30, 2020. This is mainly due to high collections. higher sales where customers pay% to 50% deposits in advance to secure supply, ”the glove maker said in a statement.
It also noted that its products are sold to more than 165 countries and it currently exports 58% of the production under its own brands through its own distribution centers and 40% through independent distributors.
“Due to the current strong demand, we are taking the opportunity to build new relationships with new customers and distributors with the anticipation that they will continue with repeat orders after the pandemic,” the group added.
In terms of capacity expansion in Malaysia, Supermax said it has implemented expansion plans to build five glove manufacturing plants between now and 2022.
“This will produce an additional production capacity of 22.25 billion, making a total of 48.42 billion gloves by the end of 2022. The Supermax Group will invest a total capital expenditure of RM1.39 billion to the new plants, “he said.
Meanwhile, the group said, vulnerability to disruption of personal protective equipment (PPE) supply chains and over-reliance on imports is the top concern of governments around the world.
“To address this important concern in the countries where Supermax operates, we are reinvesting the profits derived from our distribution centers in the respective countries, in particular in the United States and the United Kingdom.
“We are now in the planning stages and will launch the US and UK projects in 1H2021 and the target commission in stages from 1H2022,” he said.
The capex for the US is $ 300 million for phase 1 and $ 250 million for phase 2, for a total of $ 550 million, and for the UK it is $ 50 million. pounds.
Supermax has also decided to enter into the manufacturing of face masks in Malaysia and Canada.
“This is to complement our existing global supply chain that the group has built over the years. We have started delivering millions of masks to the government of Canada since the beginning of October 2020, ”he said.
During the quarter, Supermax also experienced an expansion in both its manufacturing and distribution contributions.
“We are optimistic that our private label manufacturing and distribution (OBM) business model will exhibit even healthier performance as we are in an oversold position,” he said.
Supermax, which was one of the top winners in Bursa Malaysia today, closed 57 sen or 6.19% higher at RM9.78, valuing the group at RM25.05 billion. So far this year, the counter has increased by 1,297%.
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