KUALA LUMPUR (Nov 28): Supermax Corp Bhd started its new financial year with a 31% drop in first quarter net profit to RM24.75 million or 1.89 sen a share from RM35.94 million or 2.73 sen a share a year earlier.
This was despite revenue rising to RM369.94 million from RM367.05 million, on global sales of the group’s natural rubber and nitrile rubber gloves.
Supermax, in its filing with the stock exchange, said earnings were impacted in the first quarter ended Sept 30, 2019 by lower average selling prices and an increase in production costs.
However, the group views the overall global market prospects as robust for disposable gloves for both the natural rubber and nitrile variants.
It said it will continue to focus on driving efficiency through various initiatives including its replacement and rebuilding programme for its older plants, as well as the ongoing construction of its latest plant.
“The group is well positioned to capitalise on global demand that is expected to continue growing. Sales to US markets are expected to grow as US glove buyers divert their orders away from China as a result of the ongoing US-China trade war.
“The group is also looking beyond plant #12 for its next phase of capacity growth and has acquired a piece of land in Meru, Klang on which it plans to build plants #13, #14 and #15 that will see capacity grow over 60% to more than 44 billion pieces per annum over the next five years,” it added.
Meanwhile, Supermax said it is also continuing to make progress in developing its contact lens business, which is licensed to be sold in countries including the US and Japan.
“Going forward, the group will continue to work on obtaining the licences and approvals for more of its products in more countries; further expanding its product range to include other types of lenses such as colour lenses; and increasing market penetration for its products globally in order to fully utilise its capacity,” it added.
Shares in Supermax closed two sen or 1.43% higher at RM1.42, bringing it a market capitalisation of RM1.86 billion.