Glove stocks fall after Top Glove posts weaker 4Q results

Glove stocks fall after Top Glove posts weaker 4Q results
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KUALA LUMPUR (Sept 17): Glove stocks fell today after Top Glove Corp Bhd registered weaker fourth-quarter (4Q) results on normalising glove demand and average selling prices (ASPs).

Top Glove and Kossan Rubber Industries Bhd were among the top 10 losers at noon.

Top Glove fell as much as 25 sen or 7.81% to RM2.95, before settling at RM3.04 at 3.34pm.

Kossan also dropped as much as 17 sen or 6.16% to RM2.59, before paring some losses at RM2.61.

Supermax Corp Bhd, meanwhile, slipped as much as six sen or 2.32% to RM2.53 before settling at RM2.54.

Hartalega Holdings Bhd, however, rose four sen or 0.64% to RM6.29 at 3.36pm, after falling one sen or 0.16% to an intraday low of RM6.21.

Other smaller peers Careplus Group Bhd, Comfort Gloves Bhd, Rubberex Corp (M) Bhd were also in the red.

At 3.36pm, Careplus shed two sen or 1.44% to RM1.37, Comfort Gloves lost two sen or 1.32% to RM1.49, while Rubberex was down one sen or 1.6% to 61.5 sen.

Top Glove announced today that its net profit for the 4Q ended Aug 31, 2021 (4QFY21) plunged 70.14% quarter-on-quarter to RM607.95 million from RM2.04 billion in 3QFY21.

On a year-on-year basis, its net profit also slumped 48.37% from RM1.18 billion in 4QFY20.

The group blamed the weaker 4QFY21 results on the normalising demand for gloves following mass vaccine roll-outs on a global scale, leading to lower sales volume and average selling prices (ASPs), which were not matched by a corresponding reduction in raw material prices.

"This was further affected by the finding imposed by the US Customs and Border Protection, impacting sales volume and profit," it added.

Top Glove said its performance was also affected by the Enhanced Movement Control Order during which the glove industry in the state of Selangor was not allowed to operate for 10 days, affecting 50% of Top Glove's factories.

This was coupled with the subsequent round of the Movement Control Order during which the affected facilities were only permitted to operate at 60%.

"The reduced output adversely impacted utilisation and drove costs upwards," said the group.

The group also said it expects the business environment ahead to be challenging and competitive.

Read also:
Top Glove 4Q net profit sinks 70% q-o-q and 48% y-o-y to RM608m, dragged by lower sales volume, ASPs on normalised demand

Lam Jian Wyn