KUALA LUMPUR, Dec 14 — Top Glove Corporation Bhd (Top Glove) recorded a net loss of RM168.24 million in the first quarter ended Nov 30, 2022 (Q1 2023) against a net profit of RM185.72 million in Q1 2022, as its sales volume eased by about 48 per cent year-on-year (y-o-y) due to persistent headwinds.

Its revenue also narrowed to RM632.53 million from RM1.61 billion previously.

"The softer financial performance was attributed to the ongoing glove supply and demand imbalance, which saw customers holding off restocking activity as they continued to deplete existing glove inventory, coupled with a lack of urgency to place orders in light of excess production capacity within the glove industry," it said in a filing with Bursa Malaysia today.

Additionally, the group had to contend with intensifying competition, particularly from the regional glove manufacturers, compounding the prevailing softer glove demand.

"We are operating amidst several headwinds which have afflicted the industry for the past six months, which is expected as we go through the process of normalisation which will precede our eventual recovery.

"In order to get through this challenging period, our immediate priority is to ensure we operate efficiently in view of lower capacity utilisation, maintain disciplined cost management and conserve as much cash as possible,” said Top Glove’s managing director, Lim Cheong Guan.

Meanwhile, the group expects to derive some benefits from the declining trend in raw material prices, where the average natural latex concentrate prices have declined by seven per cent to RM4.73 per kg and nitrile latex prices have decreased by 49 per cent to US$0.91per kg y-o-y.

It believes that the long-term outlook for the glove industry remains positive, as glove demand continues to grow by 10 per cent yearly, spurred by heightened glove usage and hygiene awareness post-pandemic.

However, it anticipates the current challenging environment to persist into 2023. — Bernama