Comfort Gloves net profit up on higher selling price

PETALING JAYA: Comfort Gloves Bhd posted its highest ever quarterly net profit of Rm90.33mil in the third quarter ended Oct 31, 2020, riding on the strong demand for gloves due to the Covid-19 pandemic.

Its net profit surged by 1,118% from Rm7.41mil a year ago mainly due to improved sales volume with significantly higher average selling price and better economic of scales that has improved the margin from 6% to 33%.

Comfort Gloves’ revenue jumped 105.7% to Rm276.68mil from Rm134.50mil. Earnings per share came in at 15.5 sen compared with 1.3 sen previously.

For the nine-month period, net profit jumped by 551% to Rm149.46mil from Rm22.94mil in the previous corresponding period. Revenue rose by 68.6% to Rm627.54mil from Rm372.09mil.

The profit after tax exceeded the profit registered for the financial year ended Jan 30, 2020 of Rm33.2mil by Rm116.3mil, or 350%.

“The increase in the nine-month profit was mainly due to higher revenue generated and better profit margin,” it said.

Comfort Gloves said the increased emphasis placed on hygiene and sanitation by Covid19 has led to higher demand for the group’s specialty premium gloves that offered superior resistance to viruses and dangerous sanitisation chemicals.

“Based on discussion and feedback from our partners worldwide, the group is of the opinion that this will become a new market requirement that will shape future glove demand globally.

“The emphasis on hygiene and sanitation will also not be reduced in the event a vaccine becomes generally available.

“To meet this increased demand, the group has optimised and streamlined its existing operations to increase productivity and output,” it said.

Comfort Gloves said it had commissioned additional production lines to fulfill the increasing demand from customers.

“Global shortage of butadiene has contributed to the shortage of synthetic latex and drastic nitrile latex price jump.

“The flexibility of the group’s manufacturing process and customer base outside the medical market has allowed the group to effectively manage the shortage of synthetic latex in the market.

“Specialty premium gloves manufactured by the group from natural latex are equally in demand by the group’s partners worldwide as its synthetic latex counterpart,” it said.