KUALA LUMPUR (July 27): Kossan Rubber Industries Bhd posted a net loss of RM3.3 million for the second quarter ended June 30, 2023 (2QFY2023), versus a net profit of RM45.99 million a year ago, as its gloves division made losses.

Quarterly revenue dropped 34.3% to RM387.54 million from RM589.85 million in 2QFY2022, amid lower contributions from its gloves and clean-room divisions, the company said in a bourse filing on Thursday (July 27). No dividend was declared.

But on a quarter-on-quarter basis, the group’s bottom line has improved, with net loss narrowing from RM24.25 million in 1QFY2023 — even as revenue came in lower than the RM394.70 million recorded for 1QFY2023 — thanks to lower losses from the gloves division and higher profit from its technical rubber products (TRP) and clean-room divisions.

In the six months ended June 30 (1HFY2023), the glove manufacturer incurred a net loss of RM27.55 million as opposed to a net profit of RM136.09 a year ago, as revenue shrank to RM782.25 million from RM1.27 billion.

On prospects, Kossan said although there are signs of stabilisation, the glove sector continues to be impacted by a supply-demand imbalance and this is expected to continue in the second half of FY2023.

“Aggressive expansions during the pandemic and disruptive pricing from overseas competitors have led to the current very challenging operating environment which is expected till the end of the year,” the glovemaker said.

The group embarked on a capacity rationalisation exercise in FY2022, when it decommissioned two older plants with a total capacity of three billion pieces.

“The group remains committed to the glove industry and will continue to focus on effective cost management and developing specialised products while accelerating digitalisation and automation across our operations to enhance productivity, efficiency, and lower production costs,” Kossan said.

The glovemaker's shares were up one sen or 0.74% to RM1.36, valuing the group at RM3.48 billion.