KUALA LUMPUR (Oct 9): Top Glove Corp Bhd (KL:TOPGLOV) expects its core earnings before interest, tax, depreciation and amortisation (Ebitda) margin to return to the pre-Covid level by the financial year ending Aug 31, 2027 (FY2027), supported by higher utilisation and lower cost pressures.
The world’s largest glove maker’s core Ebitda margin rose to 12% for FY2025 from 5% a year earlier as sales volume increased and production efficiency improved.
“As [sales] volume grows, we enjoy a higher utilisation as well, so overall costs can be lower," said Top Glove managing director Lim Cheong Guan at the group’s fourth FY2025 results briefing.
"Margin-wise, possible by 2027, we may reach those kinds of margin levels achieved during pre-Covid,” he said, noting that the Ebitda margin for FY2019 was three points higher than the FY2025 figure.
Executive chairman Tan Sri Lim Wee Chai said improved plant utilisation would be key to lifting profitability as the group continues to optimise costs.
“For the glove selling price, it may be difficult to increase because of external factors [such as] supply and demand, but we can improve on our costing. Our utilisation rate is still not good enough. When we run 80%, 90% of utilisation rate, our cost definitely will be much lower. That is when we increase our profit margin,” he said.
Top Glove’s utilisation rate stood at 75% in September 2025. This is an improvement from 59% at end-August 2024.
Wee Chai also said the group’s cost structure has become more competitive against Chinese manufacturers, with selling prices now nearly on par after narrowing a gap of up to US$3 (RM12.65) per 1,000 pieces over the past two years.
This has enabled the group to secure more orders amid competition from Chinese suppliers.
The group also sees opportunities to capture more sales in the US as it benefits from the higher US tariffs imposed on Chinese glove imports. North America is the largest sales market for Top Glove, contributing 26% of total sales volume in FY2025, after recording a 148% year-on-year increase.
Malaysia's glove exports to the US are subjected to a 19% tariff, while China-made gloves face a steep 80% tariff in the US market.
First full-year profit post-pandemic
Top Glove's net profit increased to RM109.07 million in FY2025, marking its first full-year profit since the pandemic.
The group suffered a net loss of RM64.88 million in FY2024 and a bigger loss of RM925.22 million in FY2023.
Revenue rose 39% year-on-year to RM3.49 billion in FY2025, supported by a strong 55% increase in sales volume.
Top Glove attributed the turnaround in FY2025 to robust sales volume growth, higher plant utilisation and improved pricing ability.
On Thursday, Top Glove’s share price settled nine sen or 15.52% higher at 67 sen, as investors cheered the group's return to profitability. However, this price is only 50% of the RM1.34 closing price at the end of last year.
At 67 sen, the stock is valued at RM5.5 billion. Top Glove was the most actively traded stock on Bursa Malaysia, with a volume of 112.23 million shares, up sharply from 12.74 million on Wednesday.