KUALA LUMPUR (Feb 16): Kossan Rubber Industries Bhd reported today a net profit of RM542.49 million for the fourth quarter ended Dec 31, 2020 (4QFY20), almost nine times the RM61 million it recorded in the corresponding quarter a year ago, thanks to higher volume of gloves sold and better average selling prices.

The net profit jump comes on the back of a revenue of RM1.31 billion, about 2.3 times the RM578.35 million it made previously, the glove makers' stock exchange filing today showed.

The 4QFY20 net profit is up 56% from the RM348.74 million that Kossan made in 3QFY20, as revenue grew 27% from RM1.03 billion. 

On announcing its latest earnings, the glove maker declared a second interim dividend of 3 sen per share, together with a special dividend of 8 sen per share — a total of 11 sen — to be paid on March 17.  

The group's full year net profit came in at RM1.09 billion, almost five times the RM224.34 million it made in FY19, as revenue grew almost 65% to RM3.65 billion from RM2.22 billion. 

"The stronger results were mainly attributable to the improved performance in the gloves and cleanroom divisions as compared with the previous year," Kossan said.

Its gloves division's revenue rose 70% to RM3.33 billion from RM1.96 billion in FY19, while profit before tax (PBT) rose to almost RM1.4 billion, about six times from RM246.32 million previously. 

Its cleanroom division's revenue more than doubled to RM155.91 million from RM74.04 million, while PBT jumped to RM31.44 million, 12 times the RM2.63 million it made previously.

The only decline seen was in its third business division, the technical rubber products, which saw revenue easing 9.68% to RM163.25 million from RM180.74 million last year, while PBT declined 18.1% to RM22.42 million from RM27.37 million. This was due to lower sales deliveries and sales of lower margin products. 

Looking ahead, Kossan expects demand for gloves to continue to exceed supply in FY21.

“Post-pandemic, the demand for gloves will continue to undergo secular growth as a result of increased healthcare standards and hygiene awareness in the medical and non-medical sectors. With our new incoming capacity and efficiency improvements, the group expects the gloves division to deliver an even stronger performance in FY2021,” it added.

Shares of Kossan closed six sen or 1.5% lower to RM3.94 today, for a market capitalisation of RM10.08 billion.