Supermax 2Q earnings jump 59% on stronger revenue, improved capacity

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KUALA LUMPUR (Feb 14): Supermax Corp Bhd’s net profit jumped 59% to RM35.9 million in the second quarter ended Dec 31, 2017 (2QFY18) from RM22.57 million a year ago, driven by stronger revenue, higher production capacity and improved operational efficiency.

Quarterly revenue grew 42% year-on-year to RM335.91 million from RM236.74 million, as it enjoyed stronger demand for gloves and achieved higher output.

The glove maker declared a single-tier interim dividend of 3 sen per share in respect of FY18, to be paid on March 28.

For the first six months of FY18 (1HFY18), the group’s net profit grew 52% y-o-y to RM63.8 million from RM42.11 million, as revenue rose 28% to RM647.94 million from RM505.74 million.

In a Bursa Malaysia filing, Supermax said global demand for both natural rubber and nitrile gloves remains strong, with healthcare awareness continuing to rise, increasing regulation of the healthcare sector and higher healthcare spending in both the public and private sectors.

“These positive factors continue to augur well for the company and the industry as a whole, while the group is able to benefit from new lines commissioned at its latest and most advanced and efficient manufacturing plants,” Supermax said on prospects.

Segmentally, it expects market participants to soon price in the lower natural rubber latex prices into the average selling prices of natural rubber gloves. As for nitrile gloves, it said tighter supply in the nitrile market at the start of the year has seen an upturn in nitrile prices in January 2018.

“Going forward, the industry hopes to see stability in the price of nitrile latex for ease of planning and operations. Nevertheless, the company has pricing mechanisms in place to mitigate the adverse impact to profit margins during times of price volatility,” the filing added.

Supermax shares rose 1 sen or 0.46% to settle at RM2.20 today, for a market capitalisation of RM1.45 billion. Over the past 12 months, the counter has gained about 8.26%.