KUALA LUMPUR (Aug 21): Comfort Gloves Bhd posted a net loss of RM4.18 million or 0.72 sen per share for the second quarter ended June 30, 2023 (2QFY2023), versus a net profit of RM3.2 million or 0.55 sen per share a year earlier.
This was mainly due to a reduction in margin resulting from higher costs and lower average selling prices (ASPs), the group said in a filing to Bursa Malaysia.
Earnings were also affected by a provision for taxation on the profit of a subsidiary, amounting to RM2.5 million.
Revenue tumbled 54.83% to RM90.23 million from RM199.77 million in 2QFY2022 primarily due to lower sales order from both local and overseas customers.
On a quarter-on-quarter basis, Comfort Gloves trimmed its loss from RM29.14 million due to higher ASPs and cost control measures, and further helped by a higher net foreign exchange gain of RM8.1 million, compared with RM800,000 previously. Revenue increased marginally from RM89.56 million in 1QFY2023.
For the first half of FY2023, Comfort Gloves’ net loss swelled to RM33.32 million from RM6.93 million in the previous January-June period, as revenue dropped 52.51% to RM179.79 million from RM376.19 million.
On prospects, Comfort Gloves said the rubber glove industry is expected to continue to face issues related to oversupply, a result of aggressive expansion and stockpiling during the pandemic, which caused supply-demand imbalances in FY2022.
“Nevertheless, the management is committed to adopting prudent procurement strategies and improving production efficiency to extract cost savings and enhance productivity levels.
“Despite the current challenging conditions, the group maintains an optimistic view of the long-term prospects for the rubber glove industry, given the continued essential utilisation of gloves in the healthcare, industrial and food sectors,” the group added.
Comfort Gloves’ share price, which has fallen 25% year-to-date, closed at 36 sen on Monday. This values the group at RM209.86 million.