Top Glove today announced its financial results for the First Quarter ended 30 November 2021 (1QFY2022), navigating a challenging landscape to commence its new financial year 2022 with positive expectations.
Sales Volume (Quantity Sold) was flattish as it transitions closer to pre COVID levels, compared with the previous financial quarter. The Group’s net cash position as at 30 November 2021 stood at RM1.06 billion.
The softer performance was mainly attributed to:
- Normalizing average selling prices (ASPs) and glove demand following mass vaccine rollout on a global scale,
- Customers remained cautious on replenishing orders,
- Raw material costs reduced at a much slower pace in comparison to glove ASPs
Wow. Looks so bleak ah.
Can give us some positive insights?
- The surplus in glove supply will likely be offset in part, by the steady and consistent growth in global glove demand
- Glove demand which was already growing at a rate of 10% yearly pre-COVID and is expected to increase further even after the pandemic recedes, on the back of heightened glove usage and hygiene awareness
- Gradually regaining its exports from Malaysia to the U.S., which is expected to improve Sales Volume in the quarters to come
- Raw material prices are on a downtrend quarter on quarter, with average natural latex concentrate prices weakening by 8% to RM5.09/kg
- Meanwhile, nitrile latex prices decreased by 19% to USD1.79/kg and are expected to continue declining at a much higher percentage going forward
- Lastly, a dividend payment of 1.2 sen per ordinary share. 😘 (Ex-date: 24 December 2021. Payment date: 10 January 2022)
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In light of the challenging business landscape, the Company will be cautious and defer its expansion plans to be in line with market trends and the demand-supply situation. The Group’s growth strategy will include a combination of organic expansion, inorganic expansion and strategic investments.
By 31 December 2025, Top Glove is projected to have a total of 59 factories comprising 46 glove factories and 13 other factories, 1,486 glove production lines and a glove production capacity of 201 billion gloves per annum.
The Group is pleased and grateful to have received shareholder approval of its proposed resolutions at Top Glove’s Extraordinary General Meeting (EGM) held on 8 December 2021, in support of the Company’s dual primary listing on the Stock Exchange of Hong Kong (HKEX), the Company’s application for which will now move onto the next stage of the listing process.
Top Glove will also continue to integrate sustainability into its daily business operations, all the more during these challenging times. Top Glove’s achievements and ongoing good work in the Environmental, Social and Governance (ESG) space include the following:
- Achieved Top 10% in the Global Health Care Equipment & Supplies industry on the Dow Jones Sustainability Index
- Pledge by Top Glove Board of Directors and Senior Leadership in support of United Nations Guiding Principles on Business and Human Rights
- Launch of Zero Harm on Mental Health programme
- MOU with Ministry of Education Malaysia to Support Local TVET Graduates
- Human Resources Accolades
- Donations and Community Support (flood relief, donation of laptops and sponsorship of surgical procedures)
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