KUALA LUMPUR (Nov 28): Supermax Corp Bhd (KL:SUPERMX) extended its streak of losses to seven quarters, as a surge in operating expenses sank the glovemaker into the red, compounded by currency losses.
Net loss for the three months ended Sept 30, 2024 (1QFY2025) was RM64.6 million, compared with RM2.05 million for the same quarter last year, Supermax said in an exchange filing. Operating expenses were 77% higher, and the company also booked unrealised foreign exchange losses totalling RM45.6 million.
Revenue, however, rose 26% year-on-year to RM224.65 million as demand picked up. However, Supermax said the company is still fulfilling low-priced contracts until the end of 2024, and flagged challenges ranging from emerging competitors in Vietnam to an acute labour shortage in Malaysia.
Chinese rivals losing their pricing edge in the US market from higher tariffs are now shifting their attention elsewhere, while Vietnam is now a “serious competitor” with low-cost production, an abundance of labour and significant investment in advanced technology, the company noted.
Domestically, the industry is grappling with a shrinking available workforce, as work permits expire and foreigners return to their home countries amid an ongoing freeze on foreign labour intake.
Nevertheless, Supermax expects its financial performance to improve in January to June 2025, as it continues to “consolidate its manufacturing operations to improve overall efficiency and productivity”.
The company said its overseas distribution centres will return to profitability once their high-price stocks have been fully depleted and when all the low-price contracts are fulfilled.
Cash and cash equivalents had fallen 36% to RM1.16 billion at the end of September, while total debt had risen to RM138.69 million, of which RM116.17 million were short-term borrowings.
No dividend was declared for the latest quarter.
Shares of Supermax closed unchanged at 86.5 sen on Thursday, giving the glovemaker a market capitalisation of RM2.35 billion ahead of the results announcement.