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KUALA LUMPUR: Kossan Rubber Industries Bhd
posted 2.5% lower Q2 net profit of RM44.7mil as compared to RM45.84mil in the previous corresponding quarter due to an increase in costs and a less favourable exchange rate in the gloves division.
The group said revenue rose 1.28% to RM496.79mil from RM490.51mil in the same quarter last year.
In the gloves segment, revenue slowed 2.36% to RM432.36mil in 2Q18 from RM442.83mil in 2Q17 and profit before tax (PBT) dropped 11.94% to RM46.34mil compared with RM52.62mil in the year-ago quarter.
"The lower performance was mainly attributable to the time-lag in cost-pass-through arising from the increase in raw material costs (NBR +13.16%), natural gas prices (+21.91%) as well as the less favourable USD/MYR exchange rate (-8.82%) compared to the same quarter of the previous year.
"The demand for glove products in the current quarter continues to be strong with stable average selling prices and higher volume sold (Vol. +8.9%) compared to 2Q17," said Kossan in a stock exchange filing.
Meanwhile, the TRP segment posted 32.07% higher revenue of RM44.54mil and a 190.44% surge in PBT to RM8.11mil over the 2017 quarter as sales deliveries and sales of higher margin products increased.
The cleanroom division recorded revenue and PBT of RM19.3mil and RM1.13mil respectively in 2Q 2018, as compared with from RM13.12mil and RM660,000 in 2Q 2017.
The group said demand for its glove products remain robust, and will be supported by Plant 16, which has an annual production capacity of up to three billion pieces and fully commissioned in August 2018.
It said plants 17 to 19 will be fully commissioned in 4Q 2018, 2Q 2018 and 4Q 2019 respectively.
The group added that it has purchased a tract of land in Bidor Perak for RM82.4mil to accomodate its expansion plans.
"The Group expects the expansion, which is currently in the planning stage, to take eight years to complete and the additional capacity which will come on-stream progressively, is projected to add a total additional output of 45 billion pieces of gloves per annum when completed.
"The land’s strategic location with excellent connectivity and available sources of utilities (natural gas, electricity and water) and local manpower will facilitate the Group’s longer-term expansion programme."
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