SHAH ALAM, Malaysia—Top Glove Corp. Bhd. has reported a sharp increase in annual sales and profit, and remains confident about the prospects of the industry despite softening demand.
For the financial year ended Aug. 31, the manufacturer posted a 127 percent year-on-year growth in sales to $3.9 billion.
Profit after tax jumped 346 percent to $1.9 billion compared to the year before, while full year earnings (EBITDA) rose 320 percent to $2.5 billion, Top Glove said.
During the fourth quarter, however, Top Glove saw a 32 percent year-on-year decline in sales to $505 million, while profit after tax came in at $150 million, down 48 percent compared to last year.
Fourth quarter volumes fell 33 percent compared to a year ago.
The group attributed the "most robust annual performance yet" to strong glove demand and higher average selling prices (ASPs) driven by the ongoing pandemic.
Fourth quarter results were softer on the back of "normalizing demand," following mass vaccine rollouts on a global scale.
The vaccination programs, Top Glove added, led to lower sales volume and ASPs, which were not matched by a corresponding reduction in raw material prices.
The effects of lower demand were compounded by the U.S. ban on Top Glove's products, which was removed earlier this month.
Performance was also affected by the Malaysian government's movement control order in July, due to which the glove industry in the state of Selangor was not allowed to operate for 10 days.
The travel restrictions, Top Glove said, affected 50 percent of the group's factories, which were later permitted to operate at 60 percent of their workforce.
"The reduced output adversely impacted utilization, driving costs upward," the gloves maker added.
As for the short-term outlook, Top Glove said it remained upbeat about industry prospects, despite higher vaccination rates, which have moderated glove demand and tapered prices.
"We are confident that demand for gloves as an essential item in the health care sector will continue its upward trend, all the more with the emergence of new virus strains," said Dato Lee Kim Meow, managing director of Top Glove.