TOP GLOVE Q4 NET PROFIT JUMPS TO RM98.6m
Company also building new manufacturing facilities to boost production capacity
TOP Glove Corp Bhd, which announced a 51 per cent net profit jump in the fourth quarter, will keep exploring mergers and acquisitions (M&As), besides growing organically.
The group will also look at forming new setups in related industries.
“While gloves will continue to be our core business, the group will also diversify into other revenue sources,” it said in a statement yesterday.
Top Glove said it was buying Eastern Press Sdn Bhd, a printing and packaging material manufacturer, for RM47.25 million.
It said the acquisition would provide synergistic benefits that would enable improvements in its supply chain coordination and allow for flexible planning and better delivery time.
Top Glove said its organic expansion plans included the construction of two new manufacturing facilities, namely Factory 31 and Factory 32, that would be operational by March and December next year, respectively.
The plants are likely to boost the group’s total production by 78 lines and production capacity by 7.8 billion gloves yearly.
By December next year, Top Glove is projected to have 31 glove factories, 628 production lines and a production capacity of 59.7 billion gloves per year.
Top Glove has also started preparations for its condom manufacturing facility, which is expected to be operational next year.
Meanwhile, the company’s net profit rose 50.9 per cent to RM98.62 million in the fourth quarter ended August 31 from RM65.32 million a year ago.
In a filing to Bursa Malaysia, Top Glove said this was due to increased sales in all regions, as well as a replenishment exercise by customers, after holding orders in the third quarter.
Its revenue rose 24.9 per cent to RM902.42 million from RM722.11 million previous corresponding period.
For the full year, Top Glove’s net profit eased 7.8 per cent to RM332.7 million from RM360.73 million previously.
Revenue rose 18 per cent to RM3.41 billion from RM2.89 billion previously following a seven per cent sales volume rise compared with the previous financial year.
It proposed a final dividend of 8.5 sen, bringing the total financial year 2017 dividend payout to 14.5 sen for a payout ratio of 54.6 per cent.
Top Glove executive chairman Tan Sri Dr Lim Wee Chai said despite the challenging operating environment, the company was upbeat and focused on the future.
“While we have closed our financial year on a positive note, this is just the beginning.
“We have higher goals ahead of us, which includes growing our market share to 30 per cent by 2020 and becoming a Fortune Global 500 company by 2040,” he said.