KUALA LUMPUR: Glove maker Supermax Corp Bhd net profit slipped below RM1bil for the first in three quarters due to falling average selling prices (ASPs).
The company posted a net profit of RM959mil, or 36.9 sen a share on revenue of RM1.86bil in the three-month ended June 30.
For the full year, net profit was RM3.8bil, or RM1.47 sen a share. Supermax has declared a special dividend payout of 15 sen a share, the company said in a filing with Bursa Malaysia today.
On its outlook, Supermax said that demand for glove has moderated as Covid-19 vaccines are being rolled out in an increasing number of countries.
"The Company believes that it will likely be gradual and not drop sharply due to the structural change in consumption, such as new consumption, new customers and greatly heightened healthcare and hygiene awareness," it said.
Meanwhile, glove prices are also being pressured by rapidly increasing supply of the protective gear.
In view of the surge in demand since the pandemic started in March 2020, there are more new glove players jumping onto the bandwagon. In addition, the current players are increasing capacity in large scale especially from players who are public-listed companies based in China, Malaysia and in Thailand.
"As more new capacity is available in the market, the global glove prices have begun to decrease," Supermax said.
"The glove prices have since dropped substantially. Currently, the Spot market prices are very much lower than the contracted prices," it added.
Supermax added 2.2 billion to the Group’s annual installed capacity in the last quarter of FY21, while five new glove manufacturing plants are being build concurrently and scheduled for completion progressively.
These new plants, Supermax said, will add 22.25 billion new capacity bringing the Group’s total capacity to 48.42 billion gloves when they are fully commissioned.
"The Supermax Group would invest total capital expenditure of RM1.39bil for the new plants," it said.