Kossan Rubber posts record earnings in Q1

Kossan noted that the average selling prices for gloves are projected to moderate as the demand-supply imbalance eases.

PETALING JAYA: Kossan Rubber Industries Bhd is confident that demand for gloves will remain above pre-pandemic levels, as the glovemaker posted its best-ever quarterly earnings.

However, the group noted that the average selling prices for gloves are projected to moderate as the demand-supply imbalance eases.

In a filing with Bursa Malaysia, the group said post Covid-19 pandemic, the demand for gloves would continue to undergo structural growth as a result of increased healthcare standards and hygiene awareness in both the medical and non-medical sectors.

For its first quarter ended March 31,2021, the group saw record net profit which rose 1,508% year-on-year to RM1.04bil while revenue was up 258.5% to RM2.19bil.

The group pointed out that its best-ever performance was driven by the unprecedented demand for glove products.

“The strong performance by the gloves division which contributes 95% and 98% of the group’s revenue and profit before taxation respectively in Q1 was mainly due to higher average selling prices, ” said the group.

On a quarter-on-quarter basis, net profit rose 92% while revenue rose 67.7%.

Earnings per share was 40.76 sen, compared with 2.53 sen a year earlier.

The group also declared a first interim dividend of 12 sen per share, with the ex-date on May 6 and payment date on May 20,2021. Meanwhile, for its technical rubber products division, it said the anticipated gradual uptick in economic activity and infrastructure spending domestically and regionally would continue to bode well for the infrastructure and automotive segment, and the group expects this division to remain profitable in 2021.

During the quarter under review, the group contributed RM50mil to the government’s Covid-19 fund which would be used to buy vaccines and health equipment.

Meanwhile, in its March 2021 projections, the Malaysian Rubber Glove Manufacturers Association (Margma) expects Malaysia’s glove export revenue for 2021 to hit RM38bil compared with RM35.3bil in 2020.

Margma projected an annual global demand growth of 15% to 20% moving forward, with global demand at 420 billion pieces for 2021.

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