Soft demand, tariffs weigh on Sri Trang results

Bangkok – Sri Trang Group has reported a sharp drop in third quarter revenue, as “soft demand” and “prolonged uncertainty” linked to the US tariffs continued to pressure its natural rubber (NR) business.

Revenue for the quarter fell 31.8% year-on-year and 30% quarter-on-quarter to THB21.57 billion (€67 million), mainly due to lower NR sales volume and falling prices.

The US ‘reciprocal tariff’ continued to create uncertainty in the global market, prompting buyers to adopt a 'more cautious approach' and delay new orders, the group said 7 Nov.

At the same time, the decline in global NR prices since the previous quarter continued to pressure performance.

Earnings (EBITDA) for the quarter came in at THB449.4 million, down 30.6% sequentially and 76.1% year-on-year.

The earnings margin stood at 2.1%, remaining broadly in line with the previous quarter but declining from 5.9% in the same period last year

During the quarter, sales from the NR segment fell nearly 38.5% from the previous year to THB15.5 billion, accounting for 71.8% of total revenue.

Total NR volume for natural rubber was just under 260,000 tonnes, down 34.6% quarter-on-quarter and 31.7% year-on-year.

The Thai group attributed the decline to “weaker demand amid prolonged uncertainty surrounding the US reciprocal tariff and a broader global economic slowdown.”

Sales of EU deforestation regulation (EUDR)-compliant rubber also fell 5.3% from the previous quarter to 49,722 tonnes, or 19.1% of total sales volume.

By geography, China remained Sri Trang’s largest market, contributing 50.7% of total revenue, followed by Thailand (20.4%), other Asian countries (12.3%), Europe (8.8%), the Americas (7.5%), and other markets (0.3%).

The average selling price for rubber products dropped 4.6% quarter-on-quarter and 9.9% year-on-year, reflecting both weaker demand and pricing pressure.

The utilisation rate across Sri Trang’s rubber production facilities averaged 53.6% in the first nine months of the year, compared to 57.7% in 2024.

By contrast, glove sales improved, supported by stronger order volumes.

The glove business generated THB6.06 billion in revenue in the third quarter, up 1.6% from the previous quarter though down 5.1% year-on-year.

The quarterly recovery was driven by a 10.7% rise in glove sales volume to 10.06 billion pieces, as customers resumed orders that had been postponed earlier in the year.

However, the average selling price declined 7.6% quarter-on-quarter to THB598 per 1,000 pieces ($18.60), due to “intense competition” and the appreciation of the Thai Baht against the US dollar.

On a year-on-year basis, Sri Trang said gloves revenue decreased despite a 4.9% increase in volume, reflecting an 8.6% fall in selling prices.

The utilisation rate of glove production facilities improved slightly to 77.3% in the third quarter, up from 75.8% in the previous quarter.

Sri Trang said it expects global demand uncertainty and pricing pressures to persist in the coming months but maintained confidence in its “diversified customer base and resilient operations” to navigate the challenging environment.