TOP GLOVE CONTINUES TO DELIVER EXCELLENT PERFORMANCE

Record Sales Volume growth of 21% and 32% increase in PAT despite headwinds

 

Shah Alam, Thursday, 15 March 2018 – Top Glove Corporation Bhd (“Top Glove”) today

announced its financial results for the Second Quarter (“2QFY18”) ended 28 February 2018, as it

continued to deliver a robust performance, in what is generally accepted as a softer second quarter

owing to shorter work months coupled with a headwind environment.

For 2QFY18, Sales Volume surged by an all-time high of 21% compared with 2QFY17 and 3% versus

1QFY18. The Group also achieved Sales Revenue of RM958.4 million, an increase of 12.6% year-onyear and 2.2% quarter-on-quarter.

Profit Before Tax (PBT) came in at RM124.5 million, growing21.2% in contrast with 2QFY17 and 2% versus 1QFY18, while the Group registered Profit After TaxPAT) of RM110 million, up 32.2% and 3.9% against 2QFY17 and 1QFY18 respectively.

The upward trend continued on a 6 months comparison. For 1HFY18, Sales Volume improved by 19%

versus 1HFY17. Sales Revenue amounted to RM1.9 billion, a 15.9% increase compared with 1HFY17.

Meanwhile, PBT grew 28.1% to RM246.5 million and PAT soared 37.7% to RM215.9 million,

compared with the corresponding periods in the previous financial year. The cumulative PAT for

1HFY18 was equivalent to 65.7% of the full year profit for FY17.

The significant growth in Sales Volume was mainly attributed to an increase in demand for natural

rubber gloves, underscoring the importance of having a balanced product mix, comprising both natural

rubber and nitrile gloves, which is aligned with market demand. Demand growth for natural rubber

gloves stemmed from emerging markets, where healthcare awareness and hygiene standards are rising

steadily, particularly Asia (excluding Japan) and Eastern Europe which respectively saw a 60% and

40% boost in Sales Volume for 1HFY18 compared with 1HFY17. The Group’s performance also

improved following a higher utilisation rate from stronger demand, an upward revision of the average selling

price and additional natural rubber glove capacity from a factory which was acquired from A1 Glove Sdn

Bhd in June 2017. However, this was offset by a marked increase in the natural gas tariff and other costs. 

Meanwhile Top Glove’s focus on continuous improvement in quality and cost efficiency, which include

Industry 4.0 initiatives, accounted for the improved profitability.

Raw material prices were lower compared with 2QFY17, with average natural rubber latex and nitrile

latex prices decreasing by 26.1% to RM4.40/kg and 1.9% to USD1.06 respectively. As against

1QFY18, the average natural rubber latex price eased 12%, while the average nitrile latex price was on

the uptrend, increasing by 5%.

Commenting on the Group’s results, Tan Sri Dr Lim Wee Chai, Top Glove Corporation Bhd’s

Executive Chairman said, “We have delivered a solid set of numbers which include our highest yearon-year Volume growth and strong growth in Profit, in spite of the shorter work months within the

quarter and cost increases. It is not easy to do well in a challenging environment and we believe our

commendable performance is largely credited to our commitment towards continuously improving our

quality and the cost efficiency of our manufacturing operations”.

To support its ambitious growth agenda, Top Glove will continue to pursue strategic expansion via the

organic and non-organic routes. It is in the process of constructing 2 new manufacturing facilities

namely, Factory 31 (operational by June 2018) and Factory 32 (operational by early 2019), which upon

completion will boost the Group’s total number of production lines by an additional 78 lines and

production capacity by 7.8 billion gloves per annum. Meanwhile, preparations for Top Glove's condom

manufacturing facility have also commenced and it is expected to be operational by June 2018.

Top Glove will also continue to explore mergers and acquisitions opportunities, as well as new set-ups

in synergistic industries, towards faster and more efficient growth. In a related development, the Group

obtained unanimous approval from its shareholders to proceed with its proposed acquisition of Aspion

Sdn Bhd (Aspion) at its Extraordinary General Meeting (EGM) held on 8 March 2018. With this, Top

Glove moves into the final phase of the acquisition process which is targeted for completion by early

April 2018. Post-acquisition, Top Glove will be better positioned to deliver innovative surgical glove

products for its global customers, while creating value for its shareholders. The acquisition also

provides synergistic effects in terms of access to new markets and product mix. The acquisition will

add another 3 glove factories with 65 production lines and a capacity of 4.6 billion gloves, and 3,000

employees. By early 2019, Top Glove is projected to have 40 factories consisting of 34 glove factories

and 6 other supporting factories, 693 glove production lines and a glove production capacity of 64.3

billion gloves per annum.

 

The Group is also progressing well on its digital adoption journey and will continue to embrace

technological advancements, which will enable Top Glove to enhance its product quality and

operational efficiency. Additionally, Top Glove will also be looking at various measures to improve

the dissemination of information to its customers and vendors towards fostering a more integrated

relationship.

Top Glove envisages a challenging business environment ahead characterised by higher operating costs,

on which the company will continue to engage with its stakeholders. Nonetheless, the Group expects

glove demand to continue growing steadily on the back of increasing healthcare standards and

awareness globally.

Tan Sri Dr Lim concluded, “While we have performed well this quarter, we will not be complacent and

are preparing ourselves for a challenging second half of the financial year. With this in mind, we will

continue to embark on quality improvement and cost-saving projects to ensure we continue to deliver

strong results in the quarters ahead.”

 

About Top Glove Corporation Bhd

Top Glove Corporation Bhd is listed on the Bursa Malaysia Stock Exchange Main Board and Singapore

Exchange Mainboard. It is also one of the component stocks of the FTSE Bursa Malaysia (“FBM”)

Mid 70 Index, FBM Top 100 Index, FBM Emas Index, FBM Emas Syariah Index, FTSE Bursa

Malaysia Hijrah Shariah Index and FTSE4Good Bursa Malaysia Index. Top Glove is currently the

world’s largest manufacturer of gloves with an established corporate culture and good business

direction of producing consistently high quality, cost efficient gloves. Top Glove has over 2,000

customers worldwide and exports to more than 195 countries.