PETALING JAYA: Supermax Corp Bhd saw a lower net profit of RM33.05 million in its fourth quarter ended June 30, 2022 compared with a net profit of RM962.53 million in the corresponding quarter last year due to decline in average selling prices (ASP), sales impacted by the Withhold Release Order imposed by the US Customs and Border Protection, the selling of high-priced inventory by importers and distributors and increased operating costs caused by unfavourable factors and increase in minimum wages.
Its revenue decreased 83.99% to RM300.23 million from RM1.88 billion in the corresponding quarter in the previous year.
For the full year, the group’s net profit declined 80.81% to RM732.43 million from RM3.82 billion. Its revenue dropped 62.49% to RM2.69 billion from RM7.16 billion in the previous year.
The group proposed a final single-tier dividend of 3 sen per share for the financial year ended June 30, 2022 for the approval of shareholders at its forthcoming AGM.
On prospects, the group said the rubber glove industry is currently well into a consolidation phase, after having gone through its strongest ever growth phase historically in 2020 and 2021, triggered by the Covid-19 pandemic that had spread across the globe.
“The sector’s strong growth spurt had attracted many new players into the market and encouraged existing players to ramp up production capacity to capitalise on the surging demand. The resulting over-supply situation coupled with demand normalising as the world comes to terms with a pandemic that is transitioning to an endemic disease, has seen ASP for gloves track lower from their record highs.
“We expect to see continued major consolidation in the rubber glove industry as ASP and demand continue to moderate from the record highs seen at the peak of the Covid-19 pandemic. Nevertheless, the structural shift triggered by the pandemic will see demand remain at a higher level compared to the pre-pandemic period and resume a longer-term upward trend once the current demand-supply disequilibrium rebalances in time. Going forward, we are expecting the market to remain weak, competition continue to be intense and the profit margins continue to moderate,” it said.
Source: The Sun Daily
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