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.
