Top Glove reports loss despite uptick in sales volumes

Shah Alam, Malaysia – Top Glove Corp. has reported a loss after tax of RM155 million (€32.7 million), down from a profit of RM102 million reported in the same period last year.

Operating earnings (EBITDA) for the three months ended 28 Feb, were also in reverse, at RM59 million down from RM93 million reported last year, Top Glove reported 16 March.

The declines, it said, were mainly due to lower sales, which fell 58% year-on-year to RM618 million during the three-month period, despite an uptick in volumes.

The financial performance continued to be impacted by headwinds which have weighed heavily on the glove industry, the Malaysian group continued.

Destocking activity persisted, driven by excess customer inventory, resulting in a softer order book, said the gloves maker, which also noted an ongoing oversupply.

Moreover, Top Glove reported “a lack of customer urgency to place orders”, due to shorter delivery times from lower manufacturer utilisation.

Earnings were further impacted by rising production costs, which the group was unable to pass on customers amid "moderating" selling prices.

Commenting on the results, managing director Lim Cheong Guan said the glove industry has been experiencing “an extremely challenging past one year.

“This is a temporary phase we will have to weather after two years of elevated pandemic-driven glove demand.

To mitigate the headwinds, Lim said Top Glove will continue to implement efficiency-enhancement and cash-saving initiatives, while increasing selling prices to offset rising costs.