KUALA LUMPUR (Jan 4): As its share price was sliding, Top Glove Corp Bhd sprang a surprise on investors by announcing that the company will be declaring a special dividend of 20% for the remaining financial quarters in the financial year ending Aug 31, 2021 (FY21).

The special dividend will be on top of its existing dividend policy of a 50% payout ratio on profit after tax and minority interests (PATAMI), said the glove manufacturer in a filing with Bursa Malaysia this afternoon.  

Top Glove started the new year on a bearish note; it plummeted to the day’s low of RM5.23 this morning. The stock tumbled 62 sen or 10.13% — the second biggest single-day loss in the past 12 months. 

Top Glove noted that the move is in recognition of its good profits and strong cash flow, as well as to reward its shareholders.

According to the filing, Top Glove shareholders will receive 70% of the company’s PATAMI as dividend. 

For the first financial quarter ended Nov 30, 2020 (1QFY21), Top Glove declared a dividend per share of 16.5 sen including a special dividend of 6%. The total dividend payout ratio is 56% of its profit.  

The market consensus estimated Top Glove to make net profit of RM10.18 billion, or RM1.256 per share, for FY21.

It made a quarterly net profit of RM2.375 billion or 29.64 sen per share for 1QFY21. Excluding the earnings in 1QFY21, Top Glove is expected to earn net profit of RM7.8 billion or 95.96 sen per share. 

Based on back of envelope calculation, Top Glove shareholders will receive dividend cheque of 67.17 sen per share with payout ratio of 70%. Based on today’s closing of RM5.50, a total dividend of 83.67 sen per share, Top Glove is offering a yield of 15.2%. 

As at Nov 30, Top Glove’s net cash position was at RM3.45 billion.