KUALA LUMPUR, March 9 — Top Glove Corporation Bhd’s net profit surged by more than 24 times to RM2.87 billion in the second quarter (Q2) of the financial year ended February 28, 2021 (2Q21) from RM115.68 million in 2Q20 as global glove demand continued to soar.
In a filing with Bursa Malaysia today, the world’s largest rubber glove manufacturer said it also achieved its highest ever quarterly sales revenue of RM5.37 billion in 2Q21, an increase of 336 per cent from RM1.23 billion in 2Q20.
For the cumulative six-month period ended Feb 28, 2021 (1H21), its net profit hit RM5.23 billion, about 22 times that of last year’s RM227.11 billion, while its revenue during the period surged to RM10.12 billion from RM2.44 billion previously.
Meanwhile, Top Glove also declared a single-tier interim dividend of 25.2 sen per share, payable on April 6, 2021.
On the company’s performance, Top Glove said its strong and healthy sales figures were attributed to the continued demand for gloves globally.
While its improved profit came on the back of higher sales output, high utilisation levels which amplified production efficiency, coupled with higher average selling prices (ASPs) in line with market pricing.
“The group’s remarkable and healthy profit was also attributed to ongoing enhancements across its operations, through digital transformation, continuous research and development (R&D) and innovation, quality and productivity initiatives and talent acquisition and development,” it said.
Commenting on the company’s results, managing director Datuk Lee Kim Meow said the group’s unprecedented performance spoke of the effectiveness of the company’s ongoing technology driven improvement initiatives, which focus on quality and cost efficiency.
“The initiatives have also enabled us to meet the increase in glove demand efficiently and effectively,” he said in a separate statement.
On the 25.2 sen dividend payment, Top Glove said it comprised a special dividend payout of 20 per cent plus 50 per cent as per the company’s dividend policy, totalling a 70 per cent dividend payout.
“The total dividend declared for 1H FY21 of 41.7 sen per share, represents a 253 per cent increase from the full year dividend for FY2020 of 11.8 sen per share,” it said.
As at February 28, 2021, the group was in a net cash position of RM4.06 billion.
Touching on the arrival of the Covid-19 vaccine, Top Glove said even with vaccines, the group is confident that global glove demand would remain robust.
“While demand is likely to stabilise post pandemic, the group expects it will not revert to pre-pandemic levels, owing to increased hygiene awareness as well as uncertainties surrounding the resolution of the Covid 19 pandemic.
“Moreover, having gone through this pandemic, governments are expected to continue stockpiling on gloves and other personal protective equipment (PPE) in preparation for possible future pandemics,” it said.
Moving forward, Top Glove maintains an optimistic outlook on its prospects, as global glove demand is estimated to grow to about 15 per cent per annum post-pandemic from a pre-pandemic level of about 10 per cent per annum, following increase in usage coupled with heightened hygiene awareness.
To ensure it remains well positioned to meet the continued strong glove demand, it said the group would continue to pursue organic expansion, inorganic expansion and strategic investments.
To this end, it said Top Glove had earmarked RM10 billion for capital expenditure over the next five years from FY21 to FY25, which would increase its current production capacity by about 100 billion pieces of gloves to a total production capacity of over 200 billion pieces of gloves.