KUALA LUMPUR, May 5 — Supermax Corp Bhd’s net profit soared 1,315 per cent to RM1.01 billion in the third quarter (Q3) of the financial year ending June 30, 2021 (FY21) versus RM71.06 million in Q3 FY20.
Revenue jumped 333 per cent to RM1.94 billion from RM447.25 million a year earlier, the glove maker said in a filing with Bursa Malaysia today.
The board of directors has declared a special dividend of 13 sen per share.
Supermax attributed the strong performance to the continued exponential increase in demand globally for medical gloves and other personal protective equipment (PPE) following the Covid-19 pandemic.
The company’s improved performance was also due to the additional production capacity of new lines at Plant #12 Block A and Block B in Klang, Selangor, commissioned during the year and which added 2.2 billion gloves to the group’s annual installed capacity, as well as the increase in the average selling prices for both its manufacturing and distribution divisions.
The glove maker said it also saw an increase in the percentage of the group’s capacity and global sales to end-users, including sales to governments and agencies in over 165 countries.
In a media statement today, Supermax said it would have recorded an even stronger performance were it not for the temporary closure at its Meru, Klang plants to do a complete sanitisation and deep-cleansing exercise due to positive Covid-19 cases among the foreign workers.
“There was a loss of production output in February at the Meru factories when workers were put into mandatory quarantine,” it said.
Supermax said it was currently building five glove manufacturing plants at a cost of RM1.39 billion and they were scheduled for completion progressively within a year.
The plants are expected to add a new glove-making capacity of 22.25 billion, bringing the group’s total capacity to 48.42 billion gloves by the end of 2022.
It is also reinvesting the earnings derived from its PPE distribution centres into the respective countries where it operates, particularly the United States (US).
Capital expenditure earmarked for the US is at US$300 million (US$1=RM4.11) for Phase 1 and US$250 million for Phase 2.
Currently, the company is working with various government agencies in the US to identify suitable manufacturing sites, negotiate with various agencies, counties and local governments to provide the infrastructure that the company needs to manufacture medical gloves.
“We have so far received approval from a state government and capital investment tax credit with a projected capital investment of US$482 million.
“We are currently working with another state for similar or better capital investment incentives before making the final decision on the state and the shortlisted manufacturing site,” it added.
Supermax said it expected glove demand and consumption to moderate with the global vaccine rollout.
“The company believes that it will likely be gradual and not drop sharply due to the structural change in consumption, such as new consumption and customers, as well as greatly heightened healthcare and hygiene awareness,” it noted.
Supermax said global glove prices had begun to decrease as more new glove players from China, Malaysia and Thailand had jumped on the bandwagon.
Glove prices have since dropped between 15 per cent and 25 per cent.
“Currently, the spot market prices are lower than the contracted prices,” it said.
Meanwhile, through its own brand manufacturing model, Supermax produces gloves, packages, and markets under its in-house brands.
It currently exports 58 per cent of its products under its brands via its distribution centres and 40 per cent through independent distributors.
The remaining two per cent is for original equipment manufacturer production.