KUALA LUMPUR: Comfort Gloves Bhd posted a strong set of financial results in the second quarter ended July 31, 2021 with net profit up 248% to RM148.82mil from RM42.79mil a year ago but the performance was weaker on-quarter.
It said in a filing with Bursa Malaysia on Tuesday, it said the higher profit after tax was mainly due to higher sales revenue and better economies of scale that had improved the margin from 22% to 30%, partially offset by the increase in latex price.
Comfort Glove said its revenue grew by 154.7% to RM504.23mil from RM197.95mil a year ago. EPS was 25.64 sen. It declared an interim dividend of two sen a share.
The higher sales revenue was mainly due to the increase in average selling price (ASP) and higher sales volume.
In the current quarter, the group achieved lower sales revenue of RM504.2mil, down by RM37mil or 7% compared with the preceding quarter.
The lower sales revenue was mainly due to softening of ASP partly covered by higher sales volume.
The profit after tax of RM148.8mil for the quarter reduced by RM70.30mil or 32% compared with preceding quarter (1QYE22).
Other than the softening of ASP, the lower profit margin was mainly due to provision of staff incentive.
In the first half, net profit was jumped to RM367.95mil vs RM59.13mil in the previous corresponding period. Its revenue jumped past the RM1bil mark to RM1.04bil from RM350.86mil.
On the prospects, it said in addition to the completely commissioned four double former dipping lines in last quarter, the commission of the additional seven double former dipping lines is still in progress which are expected to be completed towards the end of financial year ending Jan 31, 2022.
“With the fully completed production facility, the group expects to achieve better economies of scale that will improve the overall profit margin.
“The group expects that the global demand for gloves will continue to rise in long term since the outbreak of Covid-19 pandemic. With the increase of hygiene awareness in various sectors and personal care, the continuous usage and demand for gloves as a protective barrier will increase in the immediate term,” it said.
Comfort Gloves intends to capitalise on this opportunity to proceed on its ongoing expansion plans. On the other hand, the ASP of gloves is expected to be softening into the next quarter.
Moving forward, the group remains optimistic of its long-term prospects and is well prepared to capitalise the market opportunities to continue growing and succeed for years to come.