Supermax mulls higher dividend payout

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PETALING JAYA: Supermax Corp Bhd, the world’s second-largest rubber glove maker by volume, plans to increase its dividend payout ratio from the current 30% of its net profit.

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

“We have told shareholders about it, but we have not finalised the details of the new policy yet,” Thai told a press conference after Supermax’s annual general meeting yesterday.

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

Supermax (fundamental: 1; valuation: 0.8) shares will trade ex-dividend next Monday.

Supermax has also changed its financial year end from Dec 31 to June 30. As such, the current financial year comprises 18 months ending June 30, 2016.

Meanwhile, Thai said demand for gloves is currently outrunning supply as the rate of its production expansion was slower due to water supply constraints that stemmed from Selangor’s water issues.

He said nitrile gloves represented 46% of the group’s production, but noted that sufficient water supply could increase its nitrile portion to 55%.

“The expansion of glove production is very much concentrated in Selangor, because it is near to the port [Klang], and helps us save a lot of logistics cost. So as long as the water issues remain, expansion will continue to be slowed.

“The plants are profitable now, so there is no harm to our fundamentals. 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 which are affected as well,” Thai said.

 

This article first appeared in The Edge Financial Daily, on June 17, 2015.