KUALA LUMPUR: Kossan Rubber Industries Bhd’s net profit tumbled to RM90.1mil in the first quarter ended March 31 (1Q22) from RM1.04bil in the previous corresponding period, due to lower revenue from its gloves and clean-room divisions.

       The glovemaker’s revenue during the quarter fell to RM690.63mil from RM2.19bil a year earlier.

       “The gloves division recorded revenue of RM609.26mil in the first quarter of 2022, easing 70.9% from RM2.09bil in the previous corresponding quarter due to the lower average selling prices (ASP).

       “Pre-tax profit eased 91.8% to RM111.01mil in the first quarter of 2022 as compared with RM1.36bil in the previous corresponding period, in tandem with the lower revenue,” Kossan said in the notes accompanying its financial results.

       Commenting on its prospects, Kossan said glove demand and ASP have been normalising as the industry transitions to pre-pandemic levels.

       “The glove sector is seeing competition and incoming supply from existing manufacturers and new entrants. Global logistics disruptions and shipping container shortages have affected glove shipments and deliveries.

       “In addition, manpower and energy costs have increased amidst an inflationary environment. Based on these reasons, the glove sector is expected to face headwinds in the current year,” it said.

       Despite these near-term headwinds, global glove demand is expected to remain on a growth path as a result of a shift in glove usage. This is due to higher healthcare standards and hygiene awareness in both the medical and non-medical sectors, Kossan said.

       “In line with the group’s long-term growth, two new plants with a capacity of five billion pieces will be constructed by the end of next year,” it said.

       For its technical rubber products division, Kossan said the anticipated gradual uptick in economic activity and infrastructure spending domestically and regionally will continue to spur the infrastructure and automotive segments.

       Kossan added that it expects this division to remain profitable in 2022.

       “Beyond the Covid-19 pandemic, the group remains upbeat on the glove industry’s prospects and the vital role it plays within the healthcare sector.

       “The group has accelerated its transformation and reinvestments into digitalisation and automation to increase productivity and to prepare for the next phase of growth.”

       Kossan said it is confident of its future prospects and is optimistic of achieving satisfactory results for the current financial year ending Dec 31, 2022.