PETALING JAYA: After posting its weakest bottom line in 42 quarters, Kossan Rubber Industries Bhd
hinted at another poor performance in the ongoing final quarter of financial year 2022 (FY22).
Expecting strong headwinds in the fourth quarter of FY22 as well as the entire FY23, the glove maker said it will place its near-term expansion plans on hold subject to the supply-demand conditions.
“Over the long term, global glove demand is expected to remain on a growth path as a result of a shift in glove usage due to higher healthcare standards and hygiene awareness in both the medical and non-medical sectors.
“In addition, increased glove usage in emerging economies with low per capita consumption will also drive global glove demand in the long run,” it said in a filing with Bursa Malaysia.
“For the Technical Rubber Products (TRP) division, the anticipated gradual uptick in economic activity and infrastructure spending globally will continue to spur the infrastructure and automotive segments and the group expects this division to deliver a satisfactory performance in the remaining quarter of FY22.”
For the third quarter ended Sept 30, 2022, Kossan said yesterday that its net profit plunged by 95.6% year-on-year (y-o-y) to RM23.26mil.
This was the lowest quarterly net profit since the first quarter of FY12, and as a result, brought down its earnings per share to 0.91 sen.
Revenue, on the other hand, dropped by almost 57% y-o-y to RM560.52mil.
The massive fall was due to lower contributions from the gloves and cleanroom divisions, mitigated by the higher revenue in the TRP division.
The gloves division was impacted by lower average selling price (ASP) and volume sold. Higher energy and labour costs also weighed down the division.
The cleanroom division also saw reduced profits due to lower ASP.
However, the TRP division’s bottom line improved significantly, thanks to higher product deliveries and stronger performance in the infrastructure segment.
No dividend was declared for the quarter.
Cumulatively, for the first nine months of FY22, Kossan’s net profit fell by 94% y-o-y to RM159.36mil.
Revenue tumbled by 68% y-o-y to RM1.83bil.
