KUALA LUMPUR (March 20): Top Glove Corp Bhd (KL:TOPGLOV) is confident of achieving its glove sales target of 43 billion pieces for the financial year ending Aug 31, 2025 (FY2025), with stronger sales volume in the second half of the financial year.

Sales in the first half ended Feb 28, 2025 (1HFY2025) came “slightly below” half of the glovemaker’s full-year sales target, Top Glove managing director Lim Cheong Guan said during the group’s result briefing on Thursday.

He added that the group is targeting further sales growth in the US, driven by US import tariffs on Chinese gloves and a decline in raw material prices, which allows for more flexible glove pricing.

Nonetheless, he noted challenges in the European market amid Chinese trade diversion.

On a quarter-on-quarter basis (q-o-q), sales volume to Europe declined 23% in the second quarter ended Feb 28, 2025 (2QFY2025), he said, but was flat on a year-on-year (y-o-y) basis. Sales to North America rose 13% q-o-q.

“Even with that, maintaining sales volume in Europe and growing it in the US coupled with opportunities for us to sell more to other developing countries, we still maintain the target of around 43 billion pieces for FY2025,” he said. 

Underlining the tariff situation, Top Glove founder and executive chairman Tan Sri Dr Lim Wee Chai said the US tariff on Chinese imported medical gloves has risen from 60% to 70% in March, and from 28% to 48% for non-medical gloves.

“They (the Chinese players) are too far away, the import tariff is too [large], so March onwards they are no longer competitive [in the US],” he said.

Europe constituted 40% of Top Glove’s sales volume in 2QFY2025, followed by North America with 23%, Asia (22%), Latin America (8%), the Middle East (4%) and Africa (3%).

Top Glove posted a net profit of RM30.28 million for 2QFY2025 versus a net loss of RM51.2 million in the same quarter a year ago, with revenue rising 60.6% to RM883.65 million versus RM550.33 million previously.

The stronger earnings were on the back of a surge in sales and a higher utilisation rate of 58% versus 40% in 2QFY2024, enabling cost efficiencies.   

For the first six months of the year, the group reported a turnaround with a net profit of RM35.76 million while also registering higher revenue of RM1.77 billion, compared with RM1.04 billion in the previous year’s corresponding period.

Cheong Guan noted that if the group ends FY2025 with a full-year profit, it hopes to resume paying dividends, reiterating the group’s dividend policy of 50% of net profit.

Cheong Guan said the group has maintained its target utilisation rate of 70% for FY2025, despite falling short in 2QFY2025. Utilisation rate was 58% for the quarter.

The group plans to maximise utilisation of existing running plants before restarting the operations of idle and temporary shut-down factories, executive director Ng Yong Lin noted.

“We will plan it according to the incoming orders,” he added. 

Speaking on the cost impact of the minimum wage increase, which took effect in February, and the upcoming mandatory 2% Employees Provident Fund (EPF) contribution for foreign workers, Ng noted that these changes would result in an additional RM2.65 million in monthly labour costs — RM2.4 million from the minimum wage hike and RM228,000 from the 2% EPF contribution for foreign workers.

Cheong Guan stated that the additional labour costs from the two government policies amount to about 1% of cost per carton (CPC).

Finance Minister II Datuk Seri Amir Hamzah Azizan said the mandatory 2% EPF contribution is expected to be implemented by 4Q2025.

Shares in Top Glove ended two sen or 2.2% lower at 89 sen on Thursday, valuing the group at RM7.31 billion. The counter is down 33.58% this year.

Read also:
Top Glove in the black for another quarter as sales surge