SHAH ALAM, Malaysia—Prices are falling, but sales and profits keep rising for Top Glove Corp. Bhd.
Top Glove continued to deliver strong results over the three months to end of May, despite a decline in rubber glove prices.
Third quarter sales rose 147 percent to $1 billion, while profit after tax came in at $500 million—490 percent higher than a year ago. On a nine-month basis, sales were up 246 percent year-on-year at $3.5 billion, with a "healthy" profit of $1.8 billion, 11.7 times higher than last year.
Top Glove noted that sales and profit were softer quarter-on-quarter, easing 22 percent and 29 percent respectively.
The manufacturer linked the drop primarily to a 16 percent decline in the average selling prices of gloves compared to the February peak.
Furthermore, sales volume fell 4 percent quarter-on-quarter mainly due to a temporary halt in shipments to the U.S.
According to Top Glove, raw material prices rose during the quarter, affecting profit margins.
Average natural latex concentrate prices were up by 8 percent to $1.53/kg, while nitrile latex prices increased marginally by 0.4 percent to $2.31/kg quarter-on-quarter.
Going forward, Top Glove said, raw material prices are expected to be on a downtrend.
"We are pleased that the group has done well despite a tough environment, weathering several difficulties to deliver a commendable performance," Dato' Lee Kim Meow, managing director of Top Glove, said.
He attributed the performance to "technological advancements toward Industry 4.0, as well as R&D and innovation, and most importantly, good people."
The softer sequential results, he went on to say, were "due to the declining ASPs in line with glove market pricing trends, as well as the impact of glove sales from Malaysia to the U.S."
He said the company is working closely with the U.S. Customs and Border Protection Agency to speedily resolve the agency's withhold order."