KUALA LUMPUR (July 24): Rubber glove manufacturer Careplus Group Bhd went back into the black for the second quarter ended June 30, 2020 (2QFY20), posting a net profit of RM36.21 million, from a loss of RM1.96 million in the corresponding quarter last year.

In a bourse filing, the group attributed its latest performance to higher glove sales, utilisation rates and selling prices.

Additionally, an RM15.4 million one-off gain from the disposal of a 50% stake in Careplus (M) Sdn Bhd to Ansell Services (Asia) Sdn Bhd as part of a joint venture also shored up its earnings.

The group said during the quarter, it had also recognised RM63 million in revenue and RM2.1 million in profit from Careplus (M) achieved during the pre-joint venture period from Jan 1 to May 14.

Careplus (M) saw RM25.9 million in revenue and RM886,000 in profits from May 15 to June 30.

From the next quarter onwards, Careplus (M)’s accounts will be deconsolidated from the group's accounts to comply with the relevant accounting standards. Thus, it will only be sharing 50% of profits given its reduced stake in the subsidiary.

Quarterly revenue increased 26.9% to RM118.9 million, from RM86.9 million in the corresponding quarter last year.

For the first half of the year (1HFY20), it posted a net profit of RM37.35 million, from a net loss of RM1.6 million in 1HFY19.

Half-year revenue increased 23.05% to RM223.59 million, from RM172.05 million last year.

Given the surge in demand for rubber gloves amid the COVID-19 pandemic, Careplus said it is expecting strong positive results during the pandemic and beyond.

“Careglove sales outside of Brazil have increased significantly while the Brazilian sales have also turned around significantly with better margins.

While spot average selling price (ASP) remain high, the ASP for regular buyers is expected to increase in the coming quarter barring any significant change to current shortage of supply.

“The COVID-19 pandemic has accelerated our plan to increase the production capacity for the Group subsidiaries,” it said.

The group noted that by the end of the year, 10 new production lines will be installed and commissioned, with another 13 new production lines are to be installed and commissioned during 2021.

Consequently, it will double its total production capacity to 8.8 billion pieces by end-2021 from 4.1 billion pieces currently – with a total of 50 production lines by the end of next year.

Moreover, by converting its existing dormant warehouse into Factory 2, it will see an additional six new production lines with an annual capacity of 1.08 billion pieces per annum. The total estimate capital expenditure (capex) is RM31.5 million, with the project wholly-operated and owned by its unit, Rubbercare Protection Products Sdn Bhd.

Careplus also referenced its recent purchase of a 90% stake in Centro Heights Sdn Bhd – the proprietor of a budget hotel and adjoining shop lot – to create a worker’s hostel with Centro Height’s property, saying Tang Kin San, who owns the remaining 10% stake, has an option to purchase a 20% stake from the group in the next five years.

Shares in Careplus were 0.41% or a sen higher at RM2.46 per share, valuing it at some RM1.33 billion. It saw 161.13 million shares done.