KUALA LUMPUR (Nov 16): Kossan Rubber Industries Bhd's net profit rose 18.5% to RM54.15 million in the third quarter ended Sept 30, 2018 (3QFY18) from RM45.68 million a year ago, on improved performance in the gloves division.

This resulted in higher earnings per share of 4.23 sen for 3QFY18 compared with 3.57 sen for 3QFY17.

The group recorded its highest quarterly revenue of RM573.9 million in 3QFY18, up 17.3% from RM489.18 million in 3QFY17.

In a filing with Bursa Malaysia today, Kossan Rubber said its gloves division's pre-tax profit rose 17.62% to RM63 million in 3QFY18 from RM53.62 million a year ago.

"The improved performance was achieved on the back of continued strong demand for its glove products, with higher average selling prices of 11.5% year-on-year (y-o-y) and higher volume sold of 11.9% y-o-y.

"This was achieved despite an increase in natural gas (prices) of 23.7% y-o-y and nitrile prices of 38.4% y-o-y, as well as the less favourable ringgit against the US dollar. Natural rubber prices also declined by 23.7% y-o-y in 3QFY18," it added.

For the cumulative nine months (9MFY18), the group posted a 2.6% increase in net profit to RM141.27 million from RM137.72 million a year ago, while revenue grew 5.1% to RM1.55 billion from RM1.48 billion.

On current year prospects, Kossan Rubber said the glove industry's prospects remain strong with continued growth in the demand for its glove products.

The group's Plant 17, which is capable of producing up to 1.5 billion pieces of gloves per year, has been fully commissioned this month and Kossan Rubber expects it to contribute positively to the group's performance in the coming quarter.

For the technical rubber products division, Kossan Rubber views this division as stable and is optimistic of the performance for the financial year ending Dec 31, 2018.

"With the group's expansion plans and new capacity coming on-stream, coupled with the continued strong demand for our gloves, ongoing transformation programme and improvements in operating efficiency, management is confident of achieving an improved performance in the final quarter of 2018," it said.

Kossan Rubber shares closed 10 sen or 2.38% higher at RM4.30, with 358,300 shares done, bringing a market capitalisation of RM5.5 billion.