Riverstone Holdings profit down 0.8% to $8.6m in Q2

The company is getting dragged by hiking prices of raw materials.

Riverstone Holdings (Riverstone) bears the brunt of rising prices when it reported a 0.8% YoY decrease in profit to $8.6m (RM27.1m) in Q2.

According to DBS Equity Research, the current amount is also a 33.6% drop from last quarter’s $11.4m (RM36m).

In Riverstone’s financial report, whilst the company reported stabilizing sales, higher costs of raw materials and forex losses of $698,394 (RM2.2m) partly dragged them down.

Company revenue rose 36.1% from $49.7m (RM156.7m) to (RM213.2m) due to higher demand for healthcare and cleanroom gloves, the company said.

The company’s stockpiling of raw materials, especially Butadiene, helped bring the Q1 performance up but distraught the results for the next quarter.

DBS head analysts Carmen Tay and Lee Keng Ling said, “Having locked in a higher proportion of raw materials earlier on when prices were closer to the 5-year peak, the sudden rally and collapse of butadiene prices over a 3-month period between Dec 2016 and Mar 2017 hampered the company’s ability to pass on higher costs through ASP increases when negotiations with end-customers were due.”