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KUALA LUMPUR (Dec 9): Top Glove Corp Bhd’s first quarter (1Q) net profit increased to RM 2.38 billion from RM 111.43 million a year earlier, as revenue increased to 476 thousand million RM from 1.21 billion RM, supported by strong global demand for rubber gloves due to the Covid-19 pandemic.
Speaking to Bursa Malaysia today, Top Glove said it declared an interim dividend of 16.5 sen / share to reward its approximately 100,000 public shareholders.
For the quarter ended November 30, 2020 (1QFY21), Top Glove said it “achieved the highest quarterly sales revenue in history of RM4.76 billion, representing an increase of 294% compared to the 1QFY20 “.
“After-tax profit attributable to parent owners increased 20 times to RM2.38 billion, outpacing group profit for the full fiscal year 2020. Meanwhile, sales volume grew 34% compared to the Q1 2020, “Top Glove said.
According to Top Glove, the group’s strong sales figures were attributed to strong demand for gloves in emerging and developing markets, due to the ongoing global pandemic.
The company said the improvement in profits was due to higher sales production, high utilization levels that amplified production efficiency, as well as higher average selling prices (ASP) in line with market prices.
“In addition, ongoing technological advancements towards automation and digitization initiatives, effective talent development, as well as continuous innovation, quality and productivity improvements that the group continued to embark on, also contributed to improved results.” Top Glove said.
Top Glove’s 1QFY21 earnings and net income also increased quarter-over-quarter.
“For 1TFY21, the group’s sales revenue was RM4.76 billion, an increase of 53%. Meanwhile, after-tax profit attributable to parent owners doubled to RM2.38 billion,” Top Glove said.
Meanwhile, Top Glove said the deadline for the 16.5 sen dividend to shares is December 24, 2020 and the dividend will be paid on January 11, 2021.
The company said today that the total dividend payment rate of 56% of after-tax earnings attributable to parent owners exceeded the group’s set dividend payment policy of 50%.
Looking ahead, Top Glove said that in line with strong global demand for gloves, which is estimated to grow from a pre-pandemic level of around 10% a year, to around 15% a year after the pandemic after With increased usage coupled with increased hygiene awareness, the group will continue to pursue organic and inorganic expansion as well as strategic investments.
Top Glove said it is hopeful for an effective vaccine to deal with the Covid-19 pandemic and is encouraged by the progress reports made in recent days.
However, even with a vaccine, gloves will still be needed to test and administer the vaccine. Pre-pandemic, global glove demand was already growing by around 10% and is expected to continue to grow steadily driven by strong market fundamentals across geographies. While demand will stabilize after the pandemic, it will not return to pre-pandemic levels due to increased hygiene awareness.
“Despite the competitive and challenging landscape, the company maintains an optimistic outlook on the outlook. With the pandemic, Top Glove estimates that the demand for gloves will continue to grow, 20% annually in 2020, 25% annually in 2021 and 15% % per year post-pandemic.
“Steadily increasing sales orders from its loyal customers in 195 countries around the world, coupled with capacity building plans and technology-driven improvements in quality, productivity and efficiency, bode well for performance. of the group in the future, “the company said.
During today’s 12.30pm break from Bursa, Top Glove’s share price settled at 10 sen or 1.41% at RM6.99 after some 27 million shares exchanged hands.
At RM6.99, Top Glove has a market capitalization of around RM57.32 billion based on the latest reported number of issued shares of the company at 8.2 billion units.
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