PETALING JAYA (June 16): Rubber glove manufacturer Supermax Corp Bhd plans to increase its dividend payout ratio from the current 30% of net profit.

Executive chairman cum group managing director Datuk Seri Stanley Thai Kim Sim said the company was still deliberating over the matter.

"We have told shareholders about it, but we have not finalised the details of the new policy yet," Thai said at a press conference, after Supermax's (fundamental: 1.0; valuation: 0.8)  annual general meeting today.

In its latest dividend announcement, Supermax said it planned to pay a dividend of three sen a share for the fourth quarter ended December 31, 2014, bringing full-year dividends to five sen.

Supermax shares will trade ex-dividend next Monday (June 22). Supermax has changed its financial year from December 31 to June 30.

As such, the current financial year comprises 18 months ending June 30 2016.

Selangor's water supply issues have curbed Supermax's production expansion. Thai said nitrile glove represented 46% of the group's production. But with sufficient water supply, it could increase the nitrile portion to 55%.

He said demand for gloves outran supply, as the rate of production expansion was slower due to water supply constraints.

"The expansions of glove production are very much concentrated on Selangor, because it is near to the port (Klang), help us save a lot of logistic cost, so as long as the water issues remains, the expansions will continue to be slowed.

"The plants are profitable now, so there is no harm to our fundamental; it is just that we are losing some business opportunities because of capacity. Therefore, we hope the federal and state governments will resolve the water issues, because we are not the only one affected, there are many businesses out there are affected as well," Thai said.

At 2:58pm, Supermax was traded unchanged at RM2.06, for a market capitalisation of RM1.4 billion.
The stock saw 331,800 shares done.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)