KUALA LUMPUR: Kossan Rubber Industries Bhd said its quarterly profits climbed to a new high in the three-month ended June 30, but signalled that falling glove prices would curb growth in the coming quarters.
"As the demand for gloves eases, the average selling price (ASP) will decline on a gradual basis. The Group expects the results for the remaining quarters of 2021 to be satisfactory," Kossan said in a filing today.
Net profit in the second quarter rose to RM1.06bil, or 41.7 sen a share from RM131mil, or 5.12 sen a share a year ago.
Revenue soared to RM2.2bil compared with RM701mil previously.
Kossan has declared a second interim dividend of 12 sen a share.
Both revenue and pre-tax profit improved by about 2% compared with its results in the first quarter, signalling that growth has slowed down significantly compared with last year.
Glove makers, including Kossan have enjoyed robust sales and fat margins over the past 12 months as the Covid-19 pandemic drove up demand for the protective gear.
The Malaysian Rubber Glove Manufacturers Association has projected that the annual global demand growth of 15-20% moving forward, with global demand at 420 billion pieces for 2021 (2020: 360 billion pieces).
"Post-pandemic, the demand for gloves will continue to undergo structural growth as a result of increased healthcare standards and hygiene awareness in both the medical and non-medical sectors," Kossan said.
Meanwhile, the company said that it has administered close to 5,000 first dose of Covid-19 vaccines to both local and foreign employees in July.
In addition, the Group had also completed the balance payment of remediation fees amounting to RM25mil (total: RM54 million) in June 2021, ahead of the targeted completion in March 2022.