Top Glove's 1Q net profit jumps 164% on record sales volume

Top Glove's 1Q net profit jumps 164% on record sales volume
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KUALA LUMPUR (Dec 15): Top Glove Corp Bhd's net profit jumped 164% to RM128.35 million in the first quarter ended Nov 30, 2015 (1QFY16), from a year earlier, as rubber glove sales volume grew amid a weaker raw material prices and ringgit.

In a filing with Bursa Malaysia today, Top Glove said its 1QFY16 net profit rose from RM48.68 million. Revenue was higher at RM800.28 million versus RM567.63 million.

"Sales volume (quantity  sold) attained an all-time  high, which signifies a growth of 15% against 1QFY15, largely attributed to nitrile glove sales, which increased 54% compared with 1QFY15.

"The strong US Dollar and lower raw material prices have further boosted the group’s performance," Top Glove said in notes accompanying its financials.

Top Glove's chairman Tan Sri Lim Wee Chai said in a separate statement that the company's 1QFY16 revenue at RM800.28 million was a quarterly record.

Lim, however, said the group's finacials were not solely achieved, based on external tailwinds.

“While we have benefited from the strong US Dollar, our performance is not reliant on tailwinds, the effects of which, are only temporal.

“We are pleased to have maintained our upward momentum to continue delivering yet another record high this quarter. We have been consistently investing resources in improving our quality and efficiency, and it is encouraging to see our efforts bear such positive results”, he said

Looking ahead, Lim said Top Glove's growth would be via output capacity expansion, besides merger and acquisition (M&A).

He said Top Glove's output expansion in Malaysia and abroad would increase group capacity to 52 billion gloves a year by Feb 2017.

"To complement organic expansion, Top Glove is also aggressively pursuing M&A opportunities that synergise with its current business, in similar or related industries," Lim said.

Today, Top Glove shares rose 70 sen or 6% at 12:30pm to settle at at RM11.70, for a market capitalisation of RM7.3 billion. The counter was the top gainer on Bursa Malaysia.

Year-to-date, Top Glove shares had risen 159%, significantly outperforming the FBM KLCI's 7% drop.

(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.)