Top Glove Corporation Bhd or “Top Glove” today announced  its financial results for the Third Quarter ended 31 May 2024 (3QFY2024), emerging from a protracted  period of industry wide glove demand/supply imbalance, to deliver a substantially stronger performance as it moves closer to breakeven.

For 3QFY2024, the Group registered Sales Revenue of RM637 million, an increase of 16% quarter on  quarter and 20% year on year. Its operational losses reduced to RM34 million in 3QFY2024 from a  loss of RM59 million in 2QFY2024, representing a 42% improvement. Meanwhile, Sales Volume  which had been growing since 4QFY2023 continued its upward trend, rising 13% versus 2QFY2024,  reflecting the Group’s steady recovery. The Group also achieved a Profit After Tax of RM62 million,  up 255% compared with the preceding quarter and 152% higher than the corresponding quarter in  FY2023. The improved profitability factors in gains from the disposal of excess land. 

On a 9 months basis, for 9MFY2024, the Group posted Sales Revenue of RM1.68 billion, marginally  lower compared with 9MFY2023; while recording a significantly narrower Loss After Tax of RM26 million, a 94% improvement versus 9MFY2023. 

Raw material prices for 3QFY2024 were on an uptrend quarter on quarter, with the average natural  latex concentrate price up by 20% to RM6.77/kg, while the average nitrile latex price rose 16% to  USD0.89/kg.  

The Group’s more robust performance was driven primarily by stronger glove demand as customers  replenished their glove inventories having cleared excess stocks. The resultant higher utilisation coupled with ongoing quality and cost optimisation measures also positively impacted the bottom line. Although raw material costs escalated in 3QFY2024, the Group successfully reduced its cost of  production through multiple improvement initiatives. Moreover, with growing glove demand, the  Group was able to share out some of the cost increases with customers through upward revisions in average selling prices (ASPs). In addition, the sale of excess land served to strengthen the Group’s  profit and cash flow position, in line with a key objective of the Top Glove Turnaround Plan (T6). 

Mr Lim Cheong Guan, Managing Director of Top Glove remarked, “We are pleased to have seen a  return to black this quarter as the glove industry turns a corner. This is largely attributed to improving  glove demand as customers’ orders resume, alongside intensive efforts to level up our quality and cost  efficiency, as well as gains from the sale of excess land. We remain deeply appreciative of our  colleagues whose good efforts and commitment have been instrumental in accelerating our recovery." 

Reflecting its enduring commitment to sustainability, Top Glove garnered a highly commendable score  in its ESG Risk Rating by Sustainalytics, ranking number 1 out of 643 companies in the Healthcare  industry, number 1 out of 58 companies in the Medical sub industry and number 91 out of 16,215  companies across all industries, on a global scale as at 19 June 2024. Headquartered in Amsterdam,  Sustainalytics is a leading independent environmental, social and corporate governance (ESG) research,  ratings and analytics firm which rates the sustainability of listed companies based on their ESG  performance. 

Moreover, Top Glove remains committed to ensuring it fully meets the new obligations under the  European Union Deforestation Regulation (EUDR), which come into effect on 30 December 2024. The  Group’s compliance journey is on track and progressing well, with the first batch of EUDR compatible  natural rubber gloves targeted to ship by July 2024. 

Additionally, Top Glove was honoured with the Platinum Trusted Brand Award in the  Hygiene/Disposable Gloves category at the consumer vote-based Reader’s Digest Malaysian Trusted  Brand 2024 awards, for the second consecutive year. The Company outperformed its competitors  significantly by 25% in terms of total votes, achieving the highest average score across 6 key attributes:  trustworthiness and credibility, quality, value, understanding of customer needs, innovation, and social  responsibility.  

As of 18 June 2024, Top Glove was also included in Fortune magazine’s prestigious inaugural  Southeast Asia 500 list, which ranks the largest companies in the region by their FY2023 revenue.  

Towards a more sustained recovery for both the glove industry and Malaysian economy, the Group also  hopes for more clarity and consistency with regard to the implementation of foreign worker policy, which will enable corporates to better plan worker intake in line with manpower requirements. 

Poised for a Comeback: Brighter Days Ahead 

Supported by consistent improvements in its performance from quarter to quarter, Top Glove remains  optimistic about industry prospects. As the industry recovers, the Group foresees the upward  momentum will accelerate for Malaysian glove manufacturers with the high number of foreign manufacturers' gloves being included on the U.S. Food and Drug Administration (FDA)’s import alert  list. Top Glove also anticipates amplified business opportunities in the U.S. market following the U.S.  government’s impending imposition of steeply increased tariffs on medical gloves from China, making it unfeasible for Chinese glove manufacturers to continue exporting to the U.S. Customers from the  U.S. are expected to start moving away from outsourcing orders to China ahead of year 2026 when  tariffs take effect, and Top Glove as a major glove exporter to the U.S. is optimally positioned to  capture more market share from the potential trade diversion. 

Mr Lim said, “Top Glove has successfully navigated a highly challenging business environment to  deliver considerably diminished operational losses in 3QFY2024. Our efforts resulted in a stronger foundation and more refined operational strategies. We have emerged stronger, leaner and more  efficient; and are well placed to reclaim our market share and regain our leadership position." 

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