KUALA LUMPUR: Kossan Rubber Industries Bhd posted a net loss of RM3.3 million in the second quarter ended June 30, 2023 (Q2 2023) versus a net profit of RM45.99 million a year ago due to market competition, higher energy and labour costs and lower plant utilisation. 

Revenue dropped 34.3 per cent to RM387.54 million compared to RM589.86 million in Q2 2022 due to the lower revenue from the gloves and cleanroom divisions. 

The gloves division's revenue dropped 39.3 per cent to RM315.86 million in the quarter as compared with RM520.41 million in Q2 2022 due to the lower average selling price (ASP) and volume sold.

The clean-room division's revenue decreased by 22.80 per cent to RM23.86 million in as compared with RM30.88 million in a year prior due to lower ASP in its products. 

For the first half of the year (1H23) the company posted a net loss of RM27.55 million versus a net profit of RM136.1 million in 1H22. 

Revenue for the period dropped to RM782.25 million from RM1.27 billion in the corresponding period last year. 

In its Bursa filing, the company noted the glove sector continues to be impacted by a supply-demand imbalance and this is expected to continue in the second half of the year. 

"Recognising these challenges, the group had embarked on a capacity rationalisation exercise in FY22 to be more efficient and lower operating costs where we decommissioned two older plants (14 years and 19 years respectively) with a total capacity of three billion pieces. 

"Notwithstanding the challenges, the group remains committed to the glove industry and will continue to focus on effective cost management and developing specialised products while accelerating digitalization and automation across our operations to enhance productivity, efficiency, and lower production costs," it added.