KUALA LUMPUR (Oct 12): Net earnings for Top Glove Corp Bhd fell by 36.11% in the fourth quarter of its fiscal year ended Aug 31, 2016 (4QFY16) although it still concluded its silver anniversary with another record profit and sales for the full year, according to its filing with Bursa Malaysia today.

The rubber glovemaker's net profit in the quarter contracted to RM65.64 million from RM102.76 million in 4QFY15, as stiffer competition in the second half of FY16 rendered lower average selling prices. It also listed "volatility in raw material prices and foreign exchanges created a mismatch in the cost pass-through system" as a reason for the smaller bottom line.

Revenue in 4QFY16 crept up by 1.79% to RM722.11 million from RM709.45 million in the prior year.

Top Glove, which turned 25 years old this year, said it had proposed a final dividend of 8.5 sen, bringing total dividend for FY16 to 14.5 sen. It will obtain shareholders' approval for the final dividend at its annual general meeting in January.

"This (final dividend) represents a 26% increase in dividend per share compared with the previous financial year and a dividend payout ratio of 50.3%," said Top Glove in the statement.

A softer fourth quarter did not halt Top Glove from attaining a new full-year profit high. The group's net profit of RM361.05 million in FY16 was 29.05% higher than the previous corresponding year's RM279.78 million.

"The robust set of numbers was attributed to several improvement initiatives which have proven instrumental in enhancing quality and cost efficiency, the twin pillars of Top Glove's time-tested success formula. A stronger US dollar, as well as lower raw material prices earlier in the financial year, also boosted the group's performance," it said.

Correspondingly, FY16 revenue of RM2.89 billion was also another record high, with the figure improving by 15.06% from last year's RM2.51 billion. Top Glove said units of gloves sold were at an all-time high in FY16 in spite of intensifying competition and pricing pressure.

"We have done well in FY16. Amidst a challenging business environment with substantial cost increases and intense competition, we have achieved another record performance and our best year yet!" said Top Glove executive chairman Tan Sri Lim Chee Wai in the statement.

"This is a credit to the internal quality and efficiency enhancements we have been implementing continually as well as our management team and staff, who have worked hard to ensure we deliver a performance worthy of the Top Glove name," he added.

Top Glove meanwhile said the likelihood of oversupply and industry consolidation taking place going forward steepened the challenges of doing business.

Nonetheless, Top Glove is confident of overcoming any challenges that may arise by enhancing its cost management and optimising the efficiency of its production lines. The potential consolidation presents opportunities for mergers and acquisitions, it remarked.

According to Top Glove, it is in a net cash position of RM303.7 million as at Aug 31, 2016.

Shares in Top Glove rose by seven sen or 1.41% to RM5.02 as at 12:30pm noon break. Its market capitalisation stood at RM6.28 billion.