KUALA LUMPUR (May 24): Kossan Rubber Industries Bhd's net profit for the first quarter ended March 31 (1QFY19) increased 31.92% to RM58.72 million from RM44.51 million a year ago due to better performance from its core business segments.

Quarterly revenue increased 15.96% to RM561.47 million from the RM484.18 million seen a year prior.

Earnings per share (EPS) for the quarter increased to 4.59 sen from 3.48 sen posted in the corresponding quarter last year.

The group attributed its better performance this quarter to improvements in its  glove manufacturing, technical rubber products (TRP) and cleanroom products segments.

For its gloves segment, profit before tax (PBT) increased 43.17% to RM67.96 million from RM47.47 million posted a year ago while revenue rose 18.52% to RM469.99 million from RM419.31 million in 1QFY18, on the back of an 18.8% increase in glove product volume sold.

Meanwhile, profit before tax for its TRP segment increased 35.09% to RM6.81 million from RM5.04 million with revenue increasing 7.12% to RM46.68 million from the RM43.58 million seen a year ago on account of higher sales deliveries, favourable raw materials prices and more high margin products sold.

For its cleanroom division, the group posted a profit before tax (PBT) of RM580,000 from the RM420,000 seen in 1QFY18. Quarterly revenue for the segment decreased to RM17.11 million, from the RM20.37 million seen in 2018.

On its prospects, the group said demand for gloves remains resilient and is projected to grow to 300 billion pieces of gloves this year, from 268 billion prior, according to the Malaysian Rubber Glove Manufacturers Association (MARGMA).

Meanwhile, its Plant 18 in 3QFY19 and Plant 19  is set to be fully commissioned by 3Q and 4Q of this year and will increase its production capacity by 5.5 billion gloves by the end of FY19.

“Despite rising costs and heightened competition, Kossan has continued to pursue its transformation and growth strategies, focusing on cost savings as well as improvements in production technology and operating efficiency. Management is confident that FY2019 will be a growth year for the group,” said the group.

Kossan’s share priced closed 3 sen lower at RM3.82 with 927,900 shares changing hands today, giving it a market capitalisation of RM4.89 billion.