KUALA LUMPUR: The supply glut in the glove sector, leading to industry consolidation and capacity rationalisation, is expected to continue exerting pressure on the bottomline of Kossan Rubber Industries Bhd.
The glove producer said in a filing with Bursa Malaysia it is anticipating the challenging operating environment to persist over the remainder of 2023.
"Despite these immediate market challenges, the long-term outlook for glove demand remains positive, driven by increasingly stringent standards and heightened hygiene awareness in both the medical and industrial sectors," it said.
For the third-quarter ended Sept 30, 2023, Kossan recorded a net profit of RM40.97mil, which was a notable improvement from RM23.26mil in the year-ago quarter due to improved cost control management and lower raw material costs in the quarter under review.
However, the group's revenue slumped 28% year-on-year to RM403.48mil in 3Q22 due to lower revenue from all divisions, including gloves, which was 30.8% lower on weaker average selling price and sales volume.
The group's earnings per share was 1.61 sen compared to 0.91 sen in the same quarter in 2022.
Year-to-date, Kossan recorded a net profit of RM13.42mil as compared to RM159.36mil in the same 2022 period.
Revenue was down to RM1.19bil from RM1.83bil in the comparative period.