PETALING JAYA: Glove maker Supermax Corp Bhd declared five sen dividend for the first quarter ended Sept 30, 2021 despite reporting lower profits.
In a filing with Bursa Malaysia, the group said its net profit for the first quarter declined by 19% to RM638.52mil from RM789.52mil, on the back of a 7.6% jump in revenue to RM1.46bil from RM1.35bil previously.
Supermax attributed the higher revenue to strong global demand for the group’s medical gloves and other personal protective equipment amid the Covid-19 pandemic worldwide.
“It recorded increased sales from the additional capacity generated by its newest plant which was commissioned during the year,” the company said.
However, its net profit was dragged by lower average selling prices (ASPs) of gloves worldwide.
The group said competition in glove manufacturing has intensified “significantly” following a period of substantial capacity expansion across the industry by both existing and new players.
Moving forward, Supermax said the demand for gloves is expected to remain strong as the world continues to fight the Covid-19 pandemic.
“New waves continue to hit countries around the world, and continue to flare up even as more and more countries begin opening up their economic sectors and easing their SOPs.
“Since the start of the pandemic, we have seen and continue to see the emergence of new consumers and new consumption not previously seen before prior to Covid-19,” it said.
It added that governments all over the world have increased healthcare spending budgets to contain the effects of the pandemic and in preparation for possibly more waves.
In light of this, Supermax expects the demand to remain buoyant beyond 2021.
“Many of the existing players also ramped up their capacities on a large scale, especially from players who are public-listed companies based in China, Malaysia and in Thailand.
“With the substantial increase in market supply, average selling prices have started declining with spot market prices currently much lower than contracted prices,” it said.