KUALA LUMPUR: Despite a drop in Top Glove Corp Bhd’s net profit in the fourth quarter ended Aug 31 (Q4’21), the world’s largest glove maker is confident that the demand for gloves will continue to be strong on the return of its customer orders from Africa, Middle East, Vietnam, Thailand, China and the United States.
Its managing director Datuk Lee Kim Meow said its customers’ orders from these countries are returning as average selling prices (ASPs) of gloves are currently trending lower.
“These are some of the positive signs. Countries that were not active in purchasing gloves from last year and up till early this year are now coming back because it is affordable to buy gloves. They will continue to play their part to take-up the gloves,” he said during the the media and analyst briefing on its Q4’21 results.
As such, Lee is enthused that the demand for gloves would continue to surge amid heightened concerns of new Covid-19 variants.
In Q4’21, Top Glove saw a pick-up in sales volume in Africa and Middle East of 15% and 38% respectively, compared to the Q3’21.
For the full financial year ended Aug 31, 2021 (FY’21), the glovemaker saw a rise in sales volume from Latin America, Eastern Europe, Western Europe and Asia excluding Japan of 17%, 8%, 15% and 12% respectively compared to a year ago.
Following the lifting of the US Customs and Border Protection (CBP) ban, Lee said Top Glove is expected to see a boost in sales volume in the coming quarters with the resumption of sales to the US market.
It is important to note that its sales to the US accounted for 15% of the group’s total sales in FY’21.
He pointed out that exports to the US is expected to be fully normalised by December and shipments would resume as early as end of this month.
“We are back in business and have goods that are ready. We are confident that we will retain our customers in the US and also attract new customers.
“Our customers know that we have the capacity and capability. They know one of the ways to grow bigger in their industry is to have a strong supplier like Top Glove,” Lee said.
Top Glove’s disposable gloves are now admissible at all US ports of entry effective Sept 10.
After getting the nod to resume selling its glove products to the US, AmInvestment Bank Research, in its report said Top Glove could see a boost in its earnings.
“This is a positive development as it indicates that environmental, social and governance (ESG) concerns have been alleviated,” it said.
The glove maker posted a historic net profit of RM7.87bil for the FY’21 from RM1.75bil a year ago.
However, its Q4’21 earnings fell to RM607.94mil compared to RM1.17bil a year ago amid the very challenging operating environment.
The group’s revenue fell 32% to RM2.12bil in the quarter from RM3.11bil a year ago.
As at Aug 31, Top Glove’s net cash position remained healthy at RM2.05bil.
The group declared a total dividend of 65.1 sen per share, amounting to RM5.21bil for FY’21 which represents a 452% increase from the full year dividend 11.8 sen per share in FY’20.
Besides that, Top Glove said it would renew its listing application to push ahead with its plans to raise US$1bil (RM4.17bil) in Hong Kong.
The group has been seeking a dual primary listing on the Hong Kong Stock Exchange since last year, but the deal was put on hold following the import ban from US authorities.