KUALA LUMPUR (Dec 20): Top Glove Corp Bhd (KL:TOPGLOV) returned to black with a net profit of RM5.47 million for its first quarter ended Nov 30, 2024 (1QFY2025), from a net loss of RM57.71 million in the corresponding quarter a year ago, thanks to higher sales volumes and increased foreign exchange gains.
The world’s largest glove manufacturer’s revenue for 1QFY2025 surged 79.5% to RM885.89 million, from RM493.46 million in 1QFY2024, its bourse filing on Friday showed.
The company also saw improved performance on a quarter-on-quarter basis, moving from a net loss of RM3.57 million in 4QFY2024 to a net profit of RM5.47 million in 1QFY2025, as revenue grew 6.1% from RM835.31 million in 4QFY2024.
Earnings per share stood at 0.07 sen in 1QFY2025, compared to a loss per share of 0.04 sen in the previous quarter (4QFY2024). Top Glove did not declare any dividends with the latest results.
The improved performance was driven by robust glove replenishment activity and a surge in US orders, ahead of the 50% tariff imposed on glove imports from China, Top Glove said.
Ongoing quality enhancement and cost optimisation initiatives, along with a stronger US dollar, also contributed to the positive results.
Top Glove, whose plant utilisation rate for the quarter was 66%, also implemented average selling price (ASP) increases in August and September, with the impact of these adjustments beginning to be felt towards the end of 1QFY2025. The full impact of the price hike is expected to be reflected in 2QFY2025.
Top Glove is optimistic about its prospects, citing recovery of the glove industry, and trade diversion benefits from the US tariffs on Chinese-produced gloves.
The company anticipates these tariff impacts to be more substantially felt from 2QFY2025 onwards. Top Glove also said it plans to diversify risks across its operations in Malaysia, Thailand and Vietnam, to mitigate the impact of an escalating and unpredictable geopolitical situation.
Top Glove managing director Lim Cheong Guan said the group’s performance in 1QFY2025 marks a significant milestone in the company’s recovery and growth journey.
“We are highly encouraged by the steady inflow of orders, and the opportunities arising from shifting global trade dynamics. These trends, coupled with our quality and cost efficiency initiatives, position us well for accelerated growth towards reestablishing our leadership position,” Lim said.
In a separate announcement, the dual-listed Top Glove disclosed that it has set the exercise price for its proposed 1-for-20 bonus warrants at RM1.27, and SG$0.38 per warrant, subject to shareholders’ approval at the upcoming annual general meeting on Jan 15, 2025.
At Friday’s midday break, Top Glove shares were down two sen or 1.4% at RM1.38, giving the company a market capitalisation of RM11.33 billion. Year-to-date, the stock has gained 53%.
Over at the Singapore stock exchange, Top Glove was trading at 42 Singapore cents, down half a sen.