SHAH ALAM, Malaysia—Higher raw material prices have driven down annual profit for Malaysian rubber gloves manufacturer Top Glove Corp. B.h.d, despite a strong fourth quarter performance and higher sales volumes in 2017.
For the full year 2017, which ended Aug. 31, Top Glove's revenue reached a record high of $806 million, up 18 percent compared to the previous year.
The uptrend in sales came on the back of an increase in average selling prices, which arose from a surge in raw material prices, as well as a strengthening of the U.S. dollar over the course of fiscal year 2017. Additionally, higher sales of nitrile gloves, which have higher prices compared to other gloves, helped improve results.
However, post-tax profit fell by 8.2 percent to $78.9 million compared to full year 2016, during which Top Glove said it "benefited from positive external factors of currency impact and lower raw material prices."
The average natural rubber latex price was $1.37/kg during 2017, 46.4 percent higher than the previous year, while the average nitrile latex price was $1.1/kg, up 11.9 percent compared to 2016, explained Top Glove.
The trend changed during the third quarter of 2017, the Malaysian group noted, with average natural rubber latex and nitrile latex prices falling 21.3 percent and 26.4 percent, respectively.
The company posted a 25 percent increase in sales for the fourth quarter, at $214 million, compared to the same quarter in 2016. Profit after tax also saw a 50 percent rise at $23.2 million, compared with the same period last year.
The "exceptionally high" sales volume, said Top Glove, partly was due to customers replenishing in the fourth quarter following a lull in the third quarter due to higher raw material prices.