Rubberex sees strong performance as 2Q profit surges 850pct to RM22.9m

KUALA LUMPUR: Rubberex Corporation (M) Bhd, whose net profit soared by 857% to RM22.96mil in the second quarter ended June 30,2020, expects the favourable performance to continue for the rest of the year.

It announced on Thursday its order book for the existing nitrile disposable glove lines has been filled up until the first half of 2021.

Rubberex's net profit jumped from RM2.39mil a year ago, boosted by the surge in demand for its gloves. Pretax profit jumped by more than 10 times to RM27.8mil from RM2.7mil.

Its revenue increased by 58.3% to RM88.10mil from RM55.64mil. Earnings per share were 8.69 sen compared with 0.95 sen a year ago.

“The improved profits were mainly due to an overall increase in demand of the group’s products namely household, industrial and nitrile disposable gloves due to the Covid-19 pandemic outbreak since early this year, higher production efficiencies attributable to improved production planning and favourable exchange rates, ” it explained in the notes to its accounts.

Its pretax profit in 2Q increased by 164.8% to RM27.80mil from RM10.50mil in 1Q due to heightened demand and an unprecedented increase in sales due to the pandemic.

“The most notable increase in revenue was derived from the group’s nitrile disposable glove division as these gloves were deemed critical essential products for use by the healthcare and medical sectors in the fight against the pandemic, ” it said.

In the first half, its net profit jumped by 640% to RM32.22mil from RM4.35mil in the previous corresponding period. Its revenue increased by 45.6% to RM154.53mil from RM106.09mil.

On the outlook, Rubberex said it remains focused on its nitrile disposable glove division, which is currently operating at full capacity.

The improved performance in the current quarter was mainly driven by higher average selling prices of nitrile disposable gloves in the second quarter compared to the first.

“Higher capacity utilisation and improved operational efficiencies across the group’s disposable, household and industrial divisions also contributed to the improved revenue and profits.

“The group’s next capacity expansion which is expected to commence later this year should also contribute to the group’s earnings in the fourth quarter of 2020 onwards, ” it said.

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