KUALA LUMPUR (Sept 7): Comfort Gloves Bhd's latest quarterly net profit jumped by six times to RM42.8 million, from RM7.12 million a year ago, on the back of higher prices and sales volume, and better economies of scale that boosted the profit margin to 22% from 6%.
Earnings per share for the second quarter ended July 31, 2020 (2QFY21) rose to 7.34 sen from 1.26 sen last year.
The net profit was also higher by 2.6 times compared with the RM16.34 million recorded in the preceding quarter, according to the group's results filed with Bursa Malaysia. The profit margin in the preceding quarter was 11%.
Quarterly revenue rose 68.28% to RM197.95 million from RM117.64 million a year earlier, and was higher by 29.46% compared with RM152.91 million in the preceding quarter.
The group paid an interim dividend of 1.5 sen per share on Aug 28.
For the six months ended July 30, Comfort Gloves' cumulative net profit grew by 3.8 times to RM59.14 million, from RM15.53 million a year ago, while revenue increased 47.67% to RM350.86 million from RM237.59 million.
On prospects, Comfort Gloves said the flexibility of its manufacturing process and customer base outside the medical market had allowed the group to effectively manage the shortage of synthetic latex in the market.
"Speciality premium gloves manufactured by the group from natural latex are equally in demand by the group's partners worldwide as [their] synthetic latex counterpart," the group added.
Comfort Gloves said the current market environment has allowed the group to work with its partners worldwide to lock in commitments to purchasing gloves for the next 18 months.
To meet this increased demand, the group has begun optimising and streamlining its existing operations to increase productivity and output by 10% during the second quarter compared with a year earlier.
The goal, the glove maker said, is achieving an increase of 10% by the fourth quarter.
In addition to this, the group will commission additional production lines that will increase overall capacity by 20% by the next first quarter.
Comfort Gloves' shares closed four sen or 0.98% higher at RM4.13 today, valuing the group at RM2.41 billion. Some 11.42 million shares were traded. Year-to-date, the counter has soared by 423% from 79 sen.