KUALA LUMPUR (May 21): Kossan Rubber Industries Bhd (KL:KOSSAN) posted an 11% increase in net profit for the first quarter from a year earlier as lower tax expense offset the decline in revenue.
Net profit for the three months ended March 31, 2026 (1QFY2026) was RM39.53 million compared with RM35.62 million a year earlier, according to an exchange filing. Revenue for the quarter slipped 3.5% year-on-year to RM470.36 million as the stronger ringgit weighed on export receipts of gloves.
There may be “some short-term impact on revenue” from the recent appreciation of the ringgit against the US dollar, Kossan said. However, the company expects hedging mechanisms to partly blunt the impact.
Sales volume of gloves, which provided 85% of the revenue, has risen in the latest quarter and lower material cost as well as improved production efficiencies have also helped.
However, manufacturers continue to grapple with headwinds ranging from persistent industry glut to the weakening US dollars. Nitrile rubber, the key raw material for synthetic gloves, have also turned more expensive as crude oil prices stay elevated amid geopolitical troubles in the Middle East.
“The glove industry continues to face persistent global oversupply and market conditions remain challenging,” Kossan said.
At its technical rubber products division, which makes marine dock fenders and expansion joints in bridges, Kossan said the outlook for 2026 remains fraught with uncertainties and high raw material costs due to oil price volatility.
"Demand from the infrastructure sector is expected to continue its gradual recovery, while the automotive sector is expected to remain challenging amid cost pressures, foreign exchange movements and global trade uncertainties,” the company said.
Year-on-year, profit before tax at the division more than halved as revenue fell 6.5% and production cost rose.
No dividend was declared for the quarter.
Kossan extended its decline in Thursday trading after the results were announced. The stock was down two sen to RM1.21 as more than six million shares changed hands as at 4pm. The company has a market capitalisation of over RM3 billion based on the last price.