Top Glove posts FY19 net profit of Rm370.56mil
PETALING JAYA: Top Glove Corp Bhd posted a decline in net profit for the financial year ended Aug 31, 2019 (FY19), owing to a sharp increase in natural rubber latex prices and despite an improvement in sales revenue.
The glovemaker has declared a final dividend of four sen a share, bringing the total dividend payout in FY19 to 7.5 sen a share.
Announcing its fourth-quarter results for FY19, the glovemaker said net profit came in at Rm80.05mil, which was 13.3% lower than the previous corresponding quarter.
Sales revenue also slipped in the final quarter from Rm1.22bil to Rm1.19bil, marking a decrease of 2.8% year-on-year (y-o-y).
Over the entire financial year, net profit was at Rm370.56mil, 12.7% lower than the Rm424.36mil recorded in the previous year on the back of Rm4.8bil in revenue, which was 13.7% higher y-o-y.
Top Glove attributed the softer performance to increased competition in the natural rubber glove segment, accompanied by a spike in natural rubber latex prices.
The cost-pass-through mechanism to mitigate the increase in latex prices only began in the final quarter of FY19.
In addition, Top Glove had achieved record-breaking results in the previous year.
“While demand in emerging markets continues to trend upward, the percentage of the increase in demand recorded was lower compared with FY18, during which the group had experienced its strongest growth in many years,” it said.
It added that losses from the vinyl glove segment and an increase in interest expenses also contributed to the decline in profit in FY19.
Moving forward, Top Glove chairman Tan Sri Lim Wee Chai said the group would continue to pursue its expansion plans and remains positive on growth prospects on the back of growing product demand.
“The demand for gloves is still strong as demonstrated by the sales and volume growth we are seeing. With our ongoing quality, automation and process improvement initiatives we have in place, we are optimistic of a better showing in the financial year ahead,” he said.