KUALA LUMPUR (Feb 24): Supermax Corp Bhd (KL:SUPERMX) on Monday reported its ninth consecutive quarterly loss for the second quarter ended Dec 31, 2024 (2QFY2025), but the loss was smaller compared to a year earlier as revenue climbed on recovering global glove demand, alongside forex gains and cost rationalisation and automation efforts.

The quarterly net loss stood at RM4.92 million or 0.19 sen per share, compared with RM44.36 million or 1.72 sen per share in 2QFY2024.

The improvement was partly driven by a RM29.5 million forex gain from the stronger US dollar against the ringgit, as well as efficiency gains from automation and cost rationalisation measures, the group said in its bourse filing on Monday.

Quarterly revenue grew 36.57% year-on-year to RM198.79 million from RM145.55 million, as global demand for gloves gradually picked up.

However, Supermax stressed that global selling prices are still suppressed, especially with the influx of Chinese-made gloves into the US prior to Jan 1, 2025, to circumvent the 50% tariffs imposed by the US government on Chinese products.

“Since then, the Chinese-made gloves are redirected to non-US markets, at very competitive pricing,” it added.

No dividend was declared during the quarter.

For the first half of FY2025, Supermax's net loss widened to RM69.55 million from RM46.41 million in the previous year’s corresponding period, despite revenue rising 30.89% to RM423.44 million from RM323.52 million.

Supermax warned of a potential slowdown in orders in 2025, as US customers stocked up ahead of higher tariffs on Chinese-made gloves, which increased from 50% to 60% in February 2025 and will further rise to 110% in 2026.

It said that in view of the US tariff hike, Chinese glove manufacturers deployed aggressive pricing in non-US markets such as Europe and South America for rapid market penetration.

“Furthermore, to sustain their US market presence, Chinese glovemakers are relocating operations outside China such as to Vietnam and Indonesia,” said Supermax.

However, in the long run, US tariffs on China-made gloves will benefit Malaysian glovemakers by driving higher utilisation rates and average selling prices (ASPs) for Malaysian-made gloves, the group said.

Noting that its new glove factory in Houston, US commenced production in January 2025, Supermax said it expects the factory to contribute to the group’s revenue in the second half of 2025. 

The company also noted that domestically, the glove industry is grappling with acute labour shortage amid an ongoing freeze on foreign labour intake.

The industry also faces rising utilities costs, such as natural gas and electricity, with increased tariff rates.

Supermax said it is committed to riding out these operational challenges by focusing on enhancing cost efficiency through accelerating automation, ongoing workforce training and improving resource management systems.

Its cash and cash equivalent dropped by one-third to RM1.07 billion as at end-December 2024, from RM1.6 billion a year ago.

Total borrowings stood at RM155.12 million, of which RM136.13 million comprised short-term borrowings.

Shares of Supermax closed two sen or 2.4% higher at 87 sen on Monday, giving the glovemaker a market capitalisation of RM2.84 billion. The stock has fallen 35% from its recent peak of RM1.34 on Dec 30, 2024.