Top Glove’s net profit declines 97% YoY in Q2 2022

The softer financial performance was due to normalising average selling prices.

Singapore Exchange-listed Top Glove reported a net profit attributable to owners of the parent of $28.5m (RM88m) in the second quarter of the financial year 2022 ending in February, falling by 97% from $931.7m (RM2.869b) in the same period last year.

The Malaysian glovemaker’s revenue also dipped by 73% from $1.742b (RM5.365b) in February 2021 to $470m (RM1.449b) in February this year.

Its softer financial performance stemmed from the normalising average selling prices (ASPs) which are inching closer to pre-pandemic levels, Top Glove said. It further pointed out that raw material prices were on a downward trend, dipping at a slower pace than ASPs, which resulted in margin compression.

The glove manufacturing firm also had to contend with increases in other operating costs including utilities, manpower, and chemical costs as well as intensifying competition, with the new glove supply causing pricing pressure due to successful COVID-19 vaccine rollout worldwide.

Citing that the latest results are not as robust as expected, Top Glove Managing Director Lee Kim Meow said they will pursue innovation in its research and development as well as improve its commitment to sustainability.

“Having been in the glove business for 31 years, we have seen many such cycles and our experience has prepared us well to go through this one,” said Lee.

“What is important for us now is to continue to focus on quality and efficiency, improve, innovate, invest in R&D, leverage advanced technology/digitalisation and recruit more good talents, while deepening our commitment to sustainability. With all these in place and our good balance sheet position, I believe we are well able to navigate this challenging period and emerge stronger,” he added.

$1 = RM3.08