by NUR HAZIQAH A MALEK / pic by TMR FILE
COMFORT Gloves Bhd’s earnings net profit rose 247.71% year-on-year (YoY) to RM148.82 million for the second quarter ended July 31, 2021 (2Q21), as the glovemaker continued to benefit from pricing power and strong demand.
Revenue for the period surged to RM504.23 million from RM197.95 million in 2Q20 due to the increase in average selling price (ASP) and higher sales volume.
In a filing to Bursa Malaysia yesterday, the group stated that its net profit was cushioned by the higher sales revenue and better economic of sales, thus improving margins from 22% to 30%, which was partially offset by the latex price increase.
For the year-to-date period, the group achieved a higher sales revenue of RM1.05 billion compared to RM350.86 million in the same corresponding period, while net profit rose by 522% YoY to RM367.96 million.
Moving forward, Comfort Gloves expects global demand for gloves will continue to rise in the longterm since the Covid-19 outbreak.
“With the increase of hygiene awareness in various sectors and personal care, the continuous usage and demand for gloves as a protective barrier will increase in the immediate term.
“In view of the positive outlooks, the group intends to capitalise on this opportunity to proceed on its ongoing expansion plans,” it stated in its exchange filing yesterday.
It warned that the ASP of gloves are expected to be softening into the next quarter.
The group has commissioned four double former dipping lines in the previous quarter, while an additional seven are in progress and expected for completion by the end of the financial year ending Jan 31, 2022.
“With the fully completed production facility, the group expects to achieve better economies of scale that will improve the overall profit margin,” it said.
For the current financial quarter, Comfort Gloves has recommended a single-tier interim dividend of two sen per ordinary share.