Sri Trang impacted by El Nino, gloves over-supply in 2023

Bangkok – Thai natural rubber (NR) processor and gloves producer Sri Trang has reported significant declines in sales and earnings during 2023.

The group linked the reverses largely to the impact of El Nino weather effects on its NR business as well as continued oversupply in the gloves market.

Overall, revenue fell 24% to THB84 billion (€2.1 billion) in 2023, down from THB110 billion reported the year before, Sri Trang reported in February.

Earnings (EBITDA) for last year fell 62% year-on-year to THB4 billion, while the group reported a ‘net loss’ of THB434 million, the statement added.

Breaking down the results by segment, Sri Trang said revenue from NR totalled THB65 billion, representing a 25.8% decrease from 2022.

The group linked the decrease to lower average selling prices (ASP), which it said dropped 18.5% year-on-year because of a slowdown in demand amid high inventory levels.

Sales volume also fell 12.2% year-on-year to 1.3 million tonnes, because of the difficulty in sourcing raw materials due to El Nino.

Geographically in 2023, China contributed the largest portion of sales revenue at 47.0%, followed by other countries in Asia at 10.6% and Thailand at 10.1%.

North and South America contributed 5.3% of sales revenue, while Europe and other markets accounted for 4.0%.

In the gloves business, sales fell 17% year-on-year to THB19 billion, due mainly to a 24% decline in ASP linked to “ongoing oversupply.”

Sales volumes, on the other hand, increased 8.9% to 31 billion pieces for the year, driven by “strong presence in emerging markets like Asia, Africa and South America,” said Sri Trang.

Geographically, Asia contributed the largest portion of sales in 2023 at 38.9%, followed by North America at 18.1% and Europe at 16.8%.

South America contributed 16.4% while Africa and the Middle East accounted for 6.3% and 2.8% of sales revenue, respectively.

In terms of earnings, Sri Trang linked the decrease to lower operating profits of the NR and glove businesses.

The group’s overall inventory at the end of the final quarter of 2023 totalled THB 27 billion.

This included an NR inventory of THB23 billion, up THB13 billion compared to the previous quarter, as the group has been “stocking up” after the wintering period.