KUALA LUMPUR (Nov 15): Kossan Rubber Industries Bhd (KL:KOSSAN) reported a 28.15% drop in its net profit for the July-September quarter, dragged by higher raw material costs and unrealised foreign exchange (forex) losses.

Though revenue rose 25.75% to RM507.39 million in its third quarter ended Sept 30, 2024 (3QFY2024) from RM403.48 million in 3QFY2023, the glove maker's net profit fell to RM29.44 million from RM40.97 million, its bourse filing on Friday showed.

Nevertheless, the group declared a dividend payout of eight sen per share — comprising a special dividend of six sen per share and an interim dividend of two sen per share — to be paid on Dec 12, as its net profit for the nine months ended Sept 30 (9MFY2024) jumped to RM92.33 million, nearly seven times the RM13.42 million it made in 9MFY2023.

The stronger January-September earnings was largely because its gloves division returned to the black on improved production efficiency, with a pre-tax profit of RM78.6 million, compared with a loss before tax of RM15.8 million previously, despite higher raw material costs and unrealised forex losses.

The group's cumulative revenue for the period rose 17.14% to RM1.39 billion from RM1.19 billion.

Looking ahead, Kossan expects brighter times ahead with glove demand expected to be redirected away from China, as US tariffs on Chinese imports are set to jump from the current 7.5% to 50% in 2025 and further to 100% in 2026.

“This shift is expected to channel a considerable volume of US orders towards glove manufacturers in other countries, particularly Malaysia,” the group said.

“However, the benefits of this redirected demand are partly offset by the recent strengthening of the ringgit against the US dollar,” it added.

Kossan shares ended three sen or 1.33% higher at RM2.28 on Friday, giving the group a market capitalisation of RM5.83 billion.