KUALA LUMPUR, Dec 10 — Top Glove Corporation Bhd expects sales volume for its second financial quarter ending Feb 28, 2022, to be stronger by about 10 per cent compared to the first quarter amid increasing demand.
Managing director Datuk Lee Kim Meow said the group was expected to improve its sales volume to the United States (US) as it gradually regained its previous export level.
Recently, the US Customs and Border Protection lifted the import ban on the group’s products effective Sept 10, 2021.
“We have seen an increase in weekly orders coming in these past few weeks. With that, in terms of sales for the second quarter, we are expecting to see a stronger volume,” he told a virtual media briefing on the group’s financial performance for the first quarter ended Nov 31, 2021 (Q1 FY22) today.
He said demand may also be driven by concerns on the global spread of the Omicron variant, which buyers were currently monitoring to decide whether to stockpile gloves again.
“We have not seen the full response to how it has developed all over the world. A lot of our customers are basically on the lookout, and I believe some of them could also be replenishing their stock,” Lee said, noting huge orders coming from the Middle East for medical use.
The glove maker today reported a net profit of RM185.72 million in Q1 FY22 compared to RM2.36 billion a year earlier while revenue fell 67 per cent year-on-year to RM1.58 billion.
Lee said sales volume was “flattish” compared with the previous quarter as it transitioned closer to pre-Covid-19 levels.
Lee attributed the lower volume to increased competition and supply owing to expansion by existing players and entry of new players, including from China.
“During the previous months, some of our customers bought gloves from China; but with our good rapport with customers, our good cost structure... we were able to be competitive and bring them back (to the fold),” he added.
Lee said Top Glove anticipated the business environment to be challenging in the immediate term, as competition continued to intensify amid moderating glove demand.
“Nonetheless, the company remains cautiously optimistic on its industry outlook, given that global demand for gloves as an essential item will continue to grow steadily at a rate of more than 10 per cent per annum even after the pandemic recedes,” he said.
According to him, glove demand is expected to be stronger — thus offsetting the growth in supply — as the world learns to live with Covid-19 while managing the emergence of new strains, and glove usage in the medical sector in developing countries continues to increase.
“While we have entered a challenging and competitive time in the glove industry, we are not deterred. Challenges are not within our control and the way to manage them well is to focus on internal factors.
“To this end, we will continue improving our quality and efficiency through research and development (R&D), enhancement programmes and advanced technology, as we deepen our commitment to sustainability,” Lee said.
“Most importantly, we will ensure our foundation is strong by remaining mentally, physically and financially healthy, which will enable us to weather the tough times, do better and emerge stronger,” he added. — Bernama