Kossan expects glove sector challenges to persist in 2H23

KUALA LUMPUR: Despite some signs of stabilisation, Kossan Rubber Industries Bhd expects the glove sector to remain affected by a supply-demand imbalance, and this is projected to persist throughout the second half of FY23.

The glovemaker said aggressive expansions during the pandemic and disruptive pricing from overseas competitors have led to the current very challenging operating environment which is expected till the end of the year.

Kossan said the group had embarked on a capacity rationalisation exercise in FY22 to be more efficient and lower operating costs where it decommissioned two older plants (14 years and 19 years respectively) with a total capacity of three billion pieces.

“The group remains committed to the glove industry and will continue to focus on effective cost management and developing specialised products while accelerating digitalisation and automation across our operations to enhance productivity, efficiency, and lower production costs.

“For the technical rubber products 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 for FY23,” Kossan said.

In the second quarter ended June 30, Kossan reported a net loss of RM3.3mil, or loss per share of 0.13 sen against a net profit of RM46mil, or earnings per share of 1.80 sen in the same quarter last year. Its revenue fell 34.3% to RM387.5mil from RM589.8mil.

Kossan posted a net loss of RM27.5mil on revenue of RM782.2mil in the first six months to June 30.

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