‘I think this is the biggest decline since the pandemic era ended.’
Top Glove Corp Bhd's 3rd quarter net profit ended May 31, 2022 (3QFY22) was down 82.53% to RM15.29 million from RM87.55 million while revenue was flat at RM1.46 billion from RM1.45 billion in 2QFY22.
On an annual basis, the company's net profit declined 99.25% from RM2.04 billion in 3QFY21 while revenue declined by 64.52% from RM4.16 billion.
As a result, its earnings per share dropped 0.19 sen, from 25.44 sen at 2QFY21 and 1.09 sen at 2QFY22.
Top Glove listed the reason for the decline was due to falling demand and average selling price (ASP) of rubber gloves due to the transition to the Covid-19 epidemic endemic.
In addition, the company also highlighted the issue of rising production costs due to inflation and the Russia-Ukraine conflict that caused oil prices to skyrocket as among other reasons for the decline in its financial performance.
Commenting on the company's financial performance, its managing director Datuk Lee Kim Meow explained that the glove industry was in decline due to the continuing trend of normalization and demand-supply imbalance.
As a result, Top Glove is said to be delaying and reducing its major capital expenditures in the near term, while it is also trying to align its expansion plans with market conditions.
Meanwhile, as of this writing, Top Glove shares rose 2.54% or 3 sen to RM1.21 with a market capitalization of RM9.93 billion.
