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I am pleased to welcome you to the Top Glove website. This is an exciting time for our company and I hope this portal provides our multiple stakeholders with the opportunity to discover more about us and what we stand for. We also aim to ensure that information on our products, our financial performance and career opportunities with us is readily accessible.

A lot has changed since 1991, when we started the business as a local enterprise with 1 factory and 1 glove production line. Today, we have attained great success on a global level, emerging as the world’s largest manufacturer of gloves with 40 factories, 648 production lines and a production capacity of 60.5 billion pieces of gloves. We are also the preferred employer to a diverse workforce of 18,000.

There is no secret behind these achievements. What we have attained today has been founded on hard work and a focused pursuit of our Business Direction to produce consistently high-quality gloves at efficient low cost, which will continue to drive our business well into the future.

Indeed, we have come a long way from our modest beginnings but our growth trajectory is far from over. Top Glove is still a young dynamic company, and I believe that we can do even more, and do it better. Keeping the future in view, we are targeting to capture 30% of the world market by 2020. We are also keenly on the lookout for M&A opportunities and joint ventures, both in the glove business and other synergistic businesses as well.

Delivering Our Strongest Ever Full Financial Year Results

We are very pleased to have achieved another historical high with our best full-year performance yet, especially given the challenging operating environment.

For FY2018, we achieved record-breaking Sales Revenue of RM4.21 billion, surpassing the RM4 billion threshold and representing a 23.6% growth from FY2017. Our Profit Before Tax was also at an all-time high of RM522.7 million, an exceptional increase of 36.4% compared with FY2017, while Sales Volume (quantity sold) reached its peak, surging 26% year-on-year.

Our 4QFY18 performance was also commendable. We delivered Sales Revenue of RM1.22 billion, the Group’s highest ever Sales Revenue attained within a single quarter, a 34.9% increase year-on-year and up 10.6% quarter-on-quarter. Profit Before Tax came in at RM142 million, an improvement of 43.3% compared with 4QFY17. Meanwhile, Sales Volume (quantity sold) grew an exceptionally high 27% versus 4QFY17 and by 6.1% versus 3QFY18. A smaller growth in Profit After Tax was recorded as the income tax provision in 4QFY17 was lower, with FY2017 tax incentives being taken up only in 4QFY17. However, for FY2018, tax incentives were taken up over the 4 quarters.

We attribute our favourable results to our continuous pursuit of internal improvements. In particular, the application of advanced technology enabled quality and efficiency to be improved considerably, whilst also contributing to a reduction in manpower requirements. Additionally, the strong demand growth also accounted for the higher Sales Revenue, with the resulting higher utilization rate also leading to better Profit Before Tax as well as EBITDA and margins for FY2018.

Going forward, we will continue to pursue strategic expansion to ensure we are well-positioned to meet the robust global demand for gloves and achieve our ambitious Fortune Global 500 dream. In progress is the expansion of several existing facilities: F32 (Phases 1 & 2 to be completed early and end 2019 respectively), F33 (to be completed early 2019) and F5A (to be completed end 2019). Meanwhile, our newest factory F8A in Thailand, is scheduled to be operational early 2020. These will boost the Group’s total number of production lines by an additional 98 lines and production capacity by 9.8 billion gloves per annum. By 2020, Top Glove is projected to have 746 production lines and a production capacity of 69.1 billion gloves per annum. In addition, we are also looking to expand our operations to Vietnam and have entered into an agreement to acquire a piece of land for a factory which is expected to commence operations within the next 2 years.

The Group also proposed to undertake a 1-for-1 bonus issue of which was approved at our EGM on 10 October 2018. The said EGM also approved a proposal to issue guaranteed exchangeable bonds to raise funds for the repayment of bank borrowings, as well as amendments to the Company’s Constitution to facilitate the issuance of bonus shares for the bonus issue.

Underscoring our commitment to enhance shareholder value, the Board recommended a final dividend of 10 sen per share (before bonus issue), subject to shareholders’ approval at the upcoming AGM in January 2019. This would bring the total FY2018 dividend payout to 17 sen per share, an increase of 2.5 sen or 17% over FY2017, representing a net profit payout ratio of 50%.

In recognition of our product excellence, Top Glove received the Most Innovative Award 2018 and Export Excellence Award 2018 by Malaysian Rubber Export Promotion Council (MREPC). Top Glove was also included in the MSCI Global Standard Index and maintained its inclusion on the FTSE4Good Bursa Malaysia Index, both tributes to our strong, consistent growth and good corporate governance.

Notwithstanding our outstanding performance, we remain mindful of potential challenges ahead which include cost increases and intensifying competition. Nonetheless, we are still highly optimistic of prospects moving forward, given the steady global glove demand which is set to grow at about 10% yearly.

While we have concluded our financial year with another record-high for Top Glove, far from making us complacent, this has served to raise the bar on our performance and inspire us to do even better to maintain our upward momentum.

 

TOP GLOVE, TOP QUALITY, TOP EFFICIENCY

GOOD HEALTH, SAFETY FIRST & BE HONEST

Tan Sri Dr Lim Wee Chai
3 December 2018