KUALA LUMPUR (Feb 18): Kossan Rubber Industries Bhd recorded a 29.6% increase in net profit for the fourth quarter ended Dec 31, 2018 (4QFY18) to RM59.51 million from RM45.91 million in the previous corresponding quarter attributable to improvements in all of its three divisions — gloves, technical rubber products (TRPs) and clean room.
Most significantly, the glove division's revenue rose 25.4%, with profit before tax (PBT) increasing by 16.72%, compared with the same quarter a year ago.
"The improved performance was achieved on the back of continued strong demand for the group’s glove products, with higher average selling prices (+7.5%) and higher volume sold (+17.3%) compared with the previous year quarter. This was achieved despite the increase in natural gas (+23.74%) and nitrile (+11.8%) prices. In the period under review, natural rubber prices declined (-19.36%)," Kossan said in a filing with Bursa Malaysia today.
The filing showed that total revenue for 4QFY18 rose 23.4% to RM589.37 million from RM477.77 million in 4QFY17.
For the full financial year 2018 (FY18), Kossan's net profit grew 10.3% to RM200.78 million from RM182.06 million in the previous year. At the same time, the group recorded its highest ever revenue, surpassing the two-billion-ringgit-mark at RM2.144 billion, an increase of 9.5% from RM1.958 billion in FY17.
According to the filing, the stronger results were mainly attributable to improved performance in the gloves and TRPs divisions, compared with the previous year.
Moving forward, Kossan sees the demand for the group's glove products to be strong as the capacity for the group's latest Plant 17 (1.5 billion pieces) has been fully taken up, with meaningful contributions expected in the coming quarter. Meanwhile, Kossan noted that construction work for its Plant 18 (2.5 billion pieces) and Plant 19 (3 billion pieces) is currently on-track, with expected full commissioning by the second quarter and fourth quarter of 2019 respectively.
"With the group’s expansion plans and new capacity coming on-stream, continued demand for our gloves, a clear focus on cost savings, product quality and innovation, as well as improvements in production technology and operating efficiency, management is confident that FY2019 will be a growth year for the group," it said.
Shares of Kossan rose 20 sen or 5.26% today to close at RM4, for a market capitalisation of RM5.116 billion.