KUALA LUMPUR -- Top Glove, the world's largest latex glove maker, on Tuesday announced a surge in net profit and sales for the three months through February on increases in revenue and average selling prices, saying it sees no signs of a slowdown in demand despite the global rollout of COVID-19 vaccines.
Net profit for the Malaysia-based company soared twentyfourfold in the period from December through February, to 2.87 billion ringgit ($695 million) from the year-earlier quarter. Revenue increased 336% to 5.37 billion ringgit.
For the September-February fiscal first half, net profit jumped 22 times to 5.22 billion ringgit from a year earlier, while sales rose 315% to 10.12 billion ringgit.
"The improved profit came on the back of higher sales output, high utilization levels which amplified production efficiency, coupled with higher average selling prices in line with market pricing," the company said in a statement.
It also attributed what it described as a "remarkable and healthy profit" to wide-ranging improvements through "digital transformation, continuous R&D and innovation, quality and productivity initiatives as well as talent acquisition and development."
Top Glove has recorded a string of record financial results. Annual profits for the period ended Aug. 31, 2020, jumped over 400% from the previous year as demand skyrocketed for latex gloves due to the coronavirus pandemic.
"In the second financial quarter, natural latex concentrate registered a 35% increase to an average of 5.97 ringgit/kilogram and nitrile latex went up 114% to an average of $2.14/kilogram year-on-year, following shortages in supply," the statement says, referring to the December-February quarter.
"However, average prices for nitrile latex have been on the downtrend since the start of 2021, easing by 5% from January 2021 to March 2021, as supply normalizes," the statement says.
The company is optimistic about its future despite prospects for fewer COVID-19 infections. On Tuesday it said that even with vaccination drives underway around the world it is confident global glove demand will remain robust.
"While demand is likely to stabilize post-pandemic, the Group expects it will not revert to pre-pandemic levels owing to increased hygiene awareness as well as uncertainties surrounding the resolution of the COVID-19 pandemic," the statement says. "Moreover, having gone through this pandemic, governments are expected to continue stockpiling on gloves and other personal protective equipment (PPE) in preparation for possible future pandemics."
Top Glove's surge has made it one of Malaysia's most valuable corporations.
At the time of its most recent annual results, the company had estimated that annual demand for gloves would grow by 20% in 2020, 25% in 2021 and 15% thereafter. On Tuesday, Top Glove said global glove demand is estimated to grow from a pre-pandemic level of about 10% per year to about 15% per year post-pandemic, following an increase in usage coupled with heightened hygiene awareness.
It also announced an expansion plan with allocated capital expenditure of 10 billion ringgit between 2021 to 2025 to ensure the company remains well-positioned to meet the continued expected strong global glove demand.
The investments would result in an increase in its current glove production capacity by about 100 billion pieces to a total capacity of over 200 billion pieces a year.