Top Glove sees room to grow in US market despite price pressures

Malay Mail

3 days ago

KUALA LUMPUR, June 26 — Top Glove Corporation Bhd expects demand for gloves to grow with opportunities to capture additional sales from the United States (US) when there is more clarity on issues surrounding US tariffs.
It also said the tariff imposed by the US on China products is unlikely to be lower than Malaysia's.
Managing director Lim Cheong Guan said the group's diverse portfolio is an advantage. It can offer a range to meet customers' preferences and pricing requirements while acknowledging competition in other regions.
'The final tariff decision by the US government will provide much-needed visibility for both manufacturers and customers,' he said in the group's virtual results briefing for the third quarter ended May 31, 2025 (3Q FY2025) today.
'Meanwhile, to mitigate the impact of US dollar volatility on profitability, we will maintain a consistent hedging policy on a month-to-month basis,' he said.
Lim also said quarterly fluctuations in average selling prices (ASPs) are to be expected, influenced by raw material cost volatility, among other issues.
Nonetheless, market conditions are expected to stabilise over time, he said.
Overall, Lim said the group has a positive outlook for the glove industry and is confident of delivering stronger results in the coming quarters.
On the cost front, Lim said if raw material prices decline gradually, this would help ease some of the pressure from price competition.
At the same time, improvement in utilisation — 65 per cent in June — is expected to rise in the coming months. This will help to optimise cost and boost competitiveness in the challenging market environment.
The 2 per cent mandatory Employees' Provident Fund (EPF) contribution for foreign workers would cost the group RM200,000 a month, he said.
'If you look at it in terms of average selling price, it will be 0.1 per cent of the ASP,' said Lim.
For the 3Q FY2025, Top Glove saw its net profit decline to RM34.75 million from RM50.67 million a year ago.
Revenue was higher at RM830.25 million versus RM636.87 million in 3Q FY2024, it said in a filing with Bursa Malaysia.
Lim said the group's 3Q FY2025 performance was impacted by pronounced headwinds, lower ASPs, heightened competition, coupled with cost savings pass-through.
For the nine months ended May 31, 2025 (9MFY2025), Top Glove returned to the black with a net profit of RM70.50 million against a net loss of RM58.23 million a year ago.
Revenue was RM2.59 billion against RM1.68 billion in the same period last year.
In the same period, sales revenue surged 55 per cent, accompanied by a 65 per cent increase in sales volume compared with 9MFY2024.
'Our 9MFY2025 earnings before interest, taxes, depreciation, and amortisation have increased by a substantial 12 per cent from a year ago. It continues to track steadily towards pre-COVID levels, which is more reflective, as quarterly results can be more volatile due to the effects of headwinds and tailwinds. — Bernama