KUALA LUMPUR, June 9 (Xinhua) -- Top Glove Corp, the world's largest rubber glove based in Malaysia, said Thursday it posted a lower net profit of 15.29 million ringgit (about 3.48 million U.S. dollars) in the third quarter ending on May 31, 2022, due to normalizing demand and selling prices.
The company's net profit for the quarter slumped 99.25 percent from 2.04 billion ringgit a year ago, its filing to the stock exchange showed.
Its revenue for the quarter also fell 64.82 percent to 1.46 billion ringgit from 4.16 billion ringgit a year ago.
As for the nine months ending on May 31 this year, its net profit plunged 96.03 percent to 288.56 million ringgit from 7.26 billion ringgit a year earlier, while its revenue plummeted 68.52 percent to 4.5 billion ringgit from 14.29 billion ringgit.
The company said in a statement that the softer performance occurred amidst a convergence of headwinds, with production costs moving upward due to global inflation and rising crude oil prices driven up by the Russia Ukraine conflict.
Additionally, the company contended with increases in natural gas and electricity tariffs, as well as minimum wage implementation which came into effect on May 1, 2022.
The escalating costs resulted in margin compression, as the group was unable to fully pass the cost through amidst the ongoing oversupply situation.
"This is an extremely challenging time for the glove industry and this quarter's results are not reflective of our usual business performance, owing to the ongoing normalization trend coupled with demand-supply imbalance," said its managing director Lee Kim Meow.
In consideration of the moderating demand, the group has deferred and reduced its major capital expenditure for the immediate term, as it continues to align its expansion plans with market conditions.
The group expects the challenging business environment to persist in the near term but emphasizes the situation is a temporary setback. ■
