KUALA LUMPUR: Top Glove Corp Bhd’s net profit slipped 5.2 per cent to RM45.90 million in the fourth quarter, due to higher fuel costs and stiff competition from nitrile glove makers.
Its revenue, however, grew 5.8 per cent to RM580.23 million, thanks to a steady rise in global demand for medical gloves.
In its filing to the stock exchange yesterday, Top Glove said the 19 per cent increase in natural gas prices in May dented its profits. Further aggravating the situation were the knock-on inflationary effects on electricity.
Top Glove noted that the price of natural latex fell 17.3 per cent to an average of RM4.77 per kg and nitrile latex price contracted by 8.3 per cent to RM3.51 per kg in the financial year ended August.
However, the positive impact from this was minimal in light of the competitive environment that compelled cost savings to be passed on to the consumers.
As at August 31 2014, the group’s net cash remains positive at
RM157.6 million, after factoring in the privatisation of Medi-Flex Ltd for RM226.5 million, capital expenditure of RM226.5 million and interim dividend payment.
It also maintains a healthy balance sheet. Additionally, the group also benefited from a lowered effective tax rate.
“Our cash position has allowed us to pay a full-year dividend of 16 sen a share, which is equivalent to a more than 50 per cent payout ratio,” said Top Glove group chairman Tan Sri Lim Wee Chai.
“Demand for rubber gloves is strong as evidenced by the sales volume. There may be a temporary slowdown, but there is an overall growth,” Lim said.
Top Glove has 27 factories and 464 production lines with a total production capacity of 42 billion pairs of gloves per annum.