Sydney, June 19: Top Glove Corporation Bhd has released its financial results for the third quarter ending 31 May 2024 (3QFY2024), showing significant improvement as the company moves closer to breakeven.
After a challenging period of demand and supply imbalance in the glove industry, Top Glove’s performance has notably strengthened.
For 3QFY2024, Top Glove reported sales revenue of RM637 million, a 16 per cent increase quarter-on-quarter and a 20 per cent rise year-on-year. The company’s operational losses decreased to RM34 million, a 42 per cent improvement from the RM59 million loss in 2QFY2024.
Sales volume continued to grow, rising by 13 per cent compared to the previous quarter. The Group achieved a profit after tax of RM62 million, up 255 per cent from the preceding quarter and 152 per cent higher than the corresponding quarter in FY2023. This improved profitability was partially due to gains from the disposal of excess land.
On a nine-month basis, the Group posted sales revenue of RM1.68 billion, slightly lower than 9MFY2023. However, the loss after tax significantly narrowed to RM26 million, a 94 per cent improvement compared to 9MFY2023.
Raw material prices increased in 3QFY2024, with the average natural latex concentrate price up by 20 per cent to RM6.77/kg and the average nitrile latex price rising by 16 per cent to USD0.89/kg. Despite this, Top Glove successfully reduced its production costs through various improvement initiatives. Higher utilization rates and ongoing quality and cost optimization measures positively impacted the bottom line.
“We are pleased to have seen a return to black this quarter as the glove industry turns a corner. This is largely attributed to improving glove demand as customers’ orders resume, alongside intensive efforts to level up our quality and cost efficiency, as well as gains from the sale of excess land. We remain deeply appreciative of our colleagues whose good efforts and commitment have been instrumental in accelerating our recovery,” said Lim Cheong Guan, Managing Director of Top Glove.
Top Glove has also demonstrated a strong commitment to sustainability, earning top rankings in its ESG Risk Rating by Sustainalytics. The company ranked number one out of 643 companies in the healthcare industry and number one out of 58 companies in the medical sub-industry. Additionally, Top Glove remains dedicated to meeting new obligations under the European Union Deforestation Regulation (EUDR), with the first batch of EUDR-compatible natural rubber gloves set to ship by July 2024.
The company recently received the Platinum Trusted Brand Award in the Hygiene/Disposable Gloves category at the Reader’s Digest Malaysian Trusted Brand 2024 awards, achieving the highest average score across six key attributes.
Top Glove was also included in Fortune magazine’s inaugural Southeast Asia 500 list, ranking the largest companies in the region by FY2023 revenue.
Looking ahead, Top Glove remains optimistic about industry prospects, especially with the expected increase in U.S. tariffs on medical gloves from China. This change is anticipated to divert orders to other manufacturers, positioning Top Glove to capture more market share.
Lim stated, “Top Glove has successfully navigated a highly challenging business environment to deliver considerably diminished operational losses in 3QFY2024. Our efforts resulted in a stronger foundation and more refined operational strategies. We have emerged stronger, leaner, and more efficient; and are well placed to reclaim our market share and regain our leadership position.”
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