Kossan’s 4Q earnings up 2.5% on higher glove sales

by NUR HANANI AZMAN / pic by MUHD AMIN NAHARUL

KOSSAN Rubber Industries Bhd’s net profit jumped 2.5% to RM61 million in the fourth quarter ended Dec 31, 2019 (4Q19), from RM59.5 million in the previous year, contributed by increased earnings from its gloves division.

However, revenue fell 1.9% to RM578.35 million in 4Q19 compared to RM589.37 million in 4Q18, while profit before tax (PBT) rose 1.2% to RM72.28 million from RM71.4 million the previous year.

“The gloves division’s revenue eased 1.41% to RM512.03 million in 4Q19 from RM519.36 million in 4Q18, while PBT rose 5.64% to RM66.02 million in the current quarter compared to RM62.5 million a year ago.

“The improved performance was mainly attributable to higher volume sold compared to 4Q18 despite higher natural gas costs, start-up costs from the recently completed plants and higher foreign worker recruitment costs,” the company said in an exchange filing last Friday.

Meanwhile, the company’s technical rubber product division recorded revenue of RM44.93 million in the current quarter, easing 10.8% compared to RM50.38 million in 4Q18. PBT plunged 42.2% to RM4.89 million compared to RM8.46 million a year ago, mainly due to lower sales deliveries and sales of lower margin products.

Kossan’s cleanroom division recorded revenue and PBT of RM20.93 million and RM77,000 respectively in 4Q19, compared to RM18.83 million and RM1.1 million respectively in 4Q18.

For the financial year ended Dec 31, 2019 (FY19), Kossan’s net profit rose 13% to RM224.8 million from RM198.2 million, while its revenue increased 3.79% to RM2.2 billion from RM2.14 billion a year before.

The glove maker is aware of the current outbreak and has taken precautionary measures to combat the Covid-19 epidemic. The impact, if any, on group operations is closely monitored.

“With the group’s expansion plans and new capacity coming on stream, and continued improvements in operating efficiency, Kossan is confident that FY20 will be a growth year for the group,” it added.