Kossan's Q2 net profit leaps 135pct to RM131.1mil

 Publish date: Tue, 25 Aug 2020, 8:23 PM

KUALA LUMPUR: Kossan Rubber Industries Bhd's net profit for the second quarter ended June 30, 2020 (Q2 2020) jumped 135 per cent to RM131.1 million from RM55.88 million in the same period a year ago.
Revenue was 27.5 per cent higher at RM701.68 million from RM550.53 million, with the group's performance mainly attributable to the improvement in the gloves and cleanroom divisions, it said in a filing to Bursa Malaysia today.
The gloves division's revenue increased 28.83 per cent to RM630.57 million in Q2 2020 from RM489.45 million in Q2 2019 due to higher volume sold at 21.1 per cent and better average selling price.
Meanwhile, the cleanroom division's revenue grew 158.1 per cent to RM45.56 million from RM17.66 million, mainly attributable to the increase in the demand for its products as a result of the Covid-19 pandemic.
In contrast, the technical rubber products (TRPs) division recorded revenue of RM25.14 million in the quarter, easing 41.16 per cent compared to RM42.72 million previously.
This was impacted by the imposition of the Movement Control Order (MCO), which had disrupted operations and caused a slowdown in the infrastructure and automotive industries.
For the first-half period, its net profit stood higher at RM195.86 million from RM114.61 million, while revenue rose to RM1.31 billion from RM1.11 billion in the same period in 2019.
Kossan said in July, the Malaysian Rubber Glove Manufacturers Association had projected global glove demand to grow 20 per cent to 330 billion pieces in 2020, with Malaysia expected to export 220 billion pieces of gloves valued at RM21.8 billion compared with 170 billion pieces worth RM17.4 billion in 2019, amid Covid-19.
Following this, demand for protective gloves grew exponentially, leading to a supply-demand imbalance.
"With our selling prices for gloves quoted 45-60 days before delivery, the increase in prices started to be reflected in June 2020 and we will definitely see a significant quarter-on-quarter increase in average selling prices in the Q3 and especially in the Q4 of financial year 2020.
"Premised on the above and with additional capacity of around 15 per cent to 20 per cent, management is confident of a further step-up in revenue and profit growth on a quarter-on-quarter basis in the Q3 and more significantly in the Q4," it added.
 - Bernama
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