Group receives double its normal sales orders 

Shah Alam, Thursday, 19 March 2020 Top Glove Corporation Bhd (Top Glove) today announced its financial results for the Second Quarter ended 29 February 2020 (2QFY2020), delivering healthy figures amidst a softer quarter, while it looks forward to a very robust 2HFY2020.

For 2QFY2020, Top Glove achieved Sales Revenue of RM1.23 billion, an increase of 6% compared with 2QFY19 and 1.7% versus 1QFY2020. This was attributed to steady Sales Volume (Quantity Sold) growth, with particularly strong growth in the nitrile glove segment, where there was a 14% increase in Sales Volume versus 2QFY19. Sales Volume for natural rubber gloves was softer by 6% against 2QFY19, while margins were impacted by a 19% surge in natural rubber latex concentrate prices which the corresponding increase in average selling prices (ASP) was not sufficient to offset. Meanwhile, quarter-on-quarter Sales Volume for natural rubber gloves improved by 11% as Top Glove recovered market share through aggressive marketing strategies and production utilisation also increased.

Profit Before Tax for 2QFY2020 came in at RM130.4 million, 3.9% higher than 1QFY2020 as well as 2QFY19 and Profit After Tax was RM116 million, increasing by 8.7% year-on-year and 3.8% quarter- on-quarter, as the Group continued to enjoy tax incentives from its ongoing expansion, as well as unutilised tax allowances from some of its subsidiaries.

For 1HFY2020, Top Glove delivered Sales Revenue of RM2.44 billion, an improvement from 1HFY19, as Sales Volume increased marginally from 1HFY19. Meanwhile, Profit After Tax for 1HFY2020 was RM227.8 million, which is higher by 4.4% versus 1HFY19 and amounts to 62% of FY19’s Profit After Tax.

The Group also recorded significant progress in Aspion’s performance arising from enhancement initiatives implemented over the past 2 years, as Sales Volume for Aspion’s surgical gloves grew substantially by 29% both quarter-on-quarter and year-on-year. Improvement efforts will continue to be intensified across Aspion’s operations from Production to Marketing, to ensure the Group realises Aspion’s full potential and establishes a bigger presence in the surgical glove segment.

These will boost the Group’s total number of production lines by an additional 150 lines and production capacity by 17.7 billion gloves per annum. By December 2021, Top Glove is projected to have a total of 861 production lines and a production capacity of 91.1 billion gloves per annum.

On 23 January 2020, Top Glove was assigned a corporate credit rating of AA by the AA by the Malaysia Rating Corporation Berhad (MARC), the highest rating to be accorded to a Malaysian manufacturing company. This indicates Top Glove’s demonstrated strong revenue growth and net profit, positive cash flow generation, with stable working capital management, backed by strong and sustainable glove demand globally. On 27 February 2020, Top Glove also issued RM1.3 billion perpetual Sukuk, which will be utilised to refinance existing borrowings as well as for CAPEX purposes. With the restructuring of debts following the Sukuk issuance, coupled with Bank Negara Malaysia (BNM)’s and the US Federal Reserve’s action to reduce interest rates in order to support the economy, the Group expects its interest costs in the coming quarters to reduce significantly. As at 29 February 2020, the net gearing had reduced to 0.24 times, as the perpetual Sukuk is taken up as equity.