KUALA LUMPUR, March 9 — Top Glove Corporation Bhd’s net profit fell 97 per cent to RM87.55 million in the second quarter ended February 28, 2022 (Q2 FY2022) from RM2.87 billion a year earlier.

Revenue shrank 73 per cent to RM1.45 billion from RM5.37 billion previously, the world’s leading glove producer said in a filing with Bursa Malaysia today.

For the first half-year (H1 FY2022), the group posted a net profit of RM273.27 million compared with a net profit of RM5.23 billion in the previous year’s corresponding period while revenue eased to RM3.03 billion from RM10.12 billion.

"The softer financial performance came on the back of normalising average selling prices (ASPs) which are moving closer to pre-pandemic levels. Raw material prices were generally on a downward trend, decreasing at a slower pace than ASPs, which resulted in margin compression,” it said.

The group said it also had to contend with increases in other operating costs including utilities, manpower and chemical costs as well as intensifying competition, with the new glove supply causing pricing pressure in light of the successful Covid-19 vaccine rollout globally.

However, Top Glove noted that sales volume showed a marked improvement in the quarter under review compared with Q1 FY2022 following the resumption of regular glove restocking activity by customers, and as ASPs approached pre-pandemic levels.

As at February 28, it maintained a net cash position of RM656 million and net assets of RM6.95 billion.

In a separate statement, managing director Datuk Lee Kim Meow said for the past two years, Top Glove had been accustomed to delivering exceptional results.

"While our Q2 FY2022 results are not as robust as we would like them to be, this is to be expected as the pandemic recedes and it is part of the business cycle.

"Having been in the glove business for 31 years, we have seen many such cycles and our experience has prepared us well to go through this one,” he said.

According to Lee, what is important for the group now is to continue to focus on quality and efficiency, improve, innovate, invest in research and development, leverage advanced technology/digitalisation and recruit more good talents while deepening commitment to sustainability.

"With all these in place and our good balance sheet position, I believe we are well able to navigate this challenging period and emerge stronger,” he added.

Lee said glove demand would continue to grow steadily, albeit not at the accelerated but unsustainable pace during the pandemic.

"This challenging period is temporary and we will continue to focus on maintaining our strong foundation by staying mentally, physically and financially healthy,” he said. — Bernama