Supermax quarterly net profit tops RM1bil

KUALA LUMPUR: Supermax Corp Bhd joined bigger rival Hartalega Holdings Bhd to post RM1bil net profit in one quarter, propelled by rising glove prices amid robust demand for the protective gear.

The Group’s revenue and profit after tax in the three-month ended Dec 31 expanded by 47.8% and 32.9% respectively from the immediate preceding quarter, as new Covid-19 cases around the world continued to climb.

"The Average Selling Prices (ASPs) are continuing to trend upwards and the highest ASPs have not been reflected in this current quarter," it said in a statement today.

"We are optimistic that our original brand manufacturing (OBM) cum Distribution Business Model will exhibit even healthier and stellar performances in the coming quarters," Supermax said.

The company exports 58% of of its current production under its own brands via its own distribution centres and 40% through independent distributors.

The remaining 2% is for OEM production.

"Due to the current robust demand, we are taking the opportunity to build new relationships with new customers and distributors in anticipation that they will continue with repeat orders post pandemic," it said.

To meet the increased demand, Supermax has completed the commissioning of the remaining production lines in Block B of Plant #12 during the quarter under review.

This added 2.2 billion pieces to the Group’s annual installed capacity.

It is currently building five glove manufacturing plants concurrently and scheduled for completion progressively between now and year 2022.

"The new plants will add 22.25 billion new capacity bringing the Group’s total capacity to 48.42 billion gloves by end- 2022. The Supermax Group would invest total capital expenditure of RM1.39bil for the new plants," it said.

On its overseas operations, Supermax said it is reinvesting the earnings derived from its distribution centres into the respective countries in particular in the US and the UK.

"The capital expenditure earmarked for the US is US$300mil for phase #1 and US$250mil for phase #2 making total of US$550mil," it said.

Supermax said Plant #18 in USA would kick-start in 1H2021 and target to commission in stages starting 1H2022.

"We have shortlisted several suitable manufacturing site for plant #18 in the US and is currently working with State and local county for various infrastructural support," it said.

"As for Plant #19, we are still studying the suitability of the manufacturing site and it would require more time to identify the site since the UK has imposed restriction of movement control for visitors," it added.