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Supermax 3Q net profit up 4% on higher output, efficiency

TheEdge Wed, May 15, 2019 10:54am - 5 months ago

KUALA LUMPUR: Supermax Corp Bhd’s net profit rose 3.7% to RM34.62 million for the third financial quarter ended March 31, 2019 (3QFY19) from RM33.38 million a year ago, due to the commissioning of new replacement lines resulting in higher output and greater efficiency.

This resulted in higher earnings per share of 2.64 sen for 3QFY19 compared with 2.52 sen for 3QFY18. Quarterly revenue also increased 10.4% to RM361.2 million from RM327.07 million a year ago, due to the commissioning of new replacement lines within the group.

The improved quarterly performance helped lift the glove maker’s net profit for the cumulative nine months (9MFY19) to RM108.7 million, an 11.8% increase from RM97.18 million a year ago. Revenue was up 14.2% at RM1.11 billion from RM975 million for 9MFY18.

In a filing with Bursa Malaysia yesterday, Supermax said the global market for disposable gloves remains vibrant for natural rubber and nitrile variants.

“A slowdown in demand earlier in the year raised concerns of an oversupply situation. However, the slowdown did not sustain as demand is rising again, driven by factors such as rising healthcare awareness and reforms mandating its use in the medical sector, as well as rising consumption in other non-traditional sectors such as beauty-related and household-use ones.

“Year-on-year, global demand continues to grow at 8% to 10%. These continue to augur well for the group and the industry,” it noted.

It added that construction works for the group’s 12th plant are still progressing steadily. “Once completed and the production lines [are] commissioned, the new capacity will significantly boost its total production capacity and lift the top and bottom lines.”

Supermax said it will still strive to obtain the licences and approvals required for more of its contact lens products in more countries; further expand its product range to include other types of lenses such as colour ones and those made from newer, superior materials; and increase market penetration for its products globally.

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