Glove maker Riverstone doubles H1 earnings to RM137.5m; raises interim dividend to 4 sen

MALAYSIAN glove-maker Riverstone Holdings posted a 119.3-per-cent surge in net profit to RM137.5 million (S$45.27 million) for the six months ended June, driven by the spike in global demand for its health-care examination gloves, clean-room gloves and face masks.

With stronger sales, the mainboard-listed company recorded a 30.5-per-cent jump in revenue to RM626.7 million in H1. As a mark of confidence and to reward shareholders, Riverstone has declared an interim dividend of 4.00 sen, up from 1.55 sen for the same period last year.

With higher sales, selling and distribution expenses increased 9 per cent to RM9.3 million for H1. But Riverstone also posted a stronger margin, with its blended gross profit margin expanding 11.8 percentage points year on year to 31.6 per cent.

The robust sales performance boosted net operating cash flows to RM222.2 million, up from RM73.0 a year ago. This bolstered its net cash position to RM264.2 million as at end-June, against RM10 million in bank borrowings.

Riverstone's chief executive and chairman Wong Teek Son noted that while the firm has been lifted by industry tailwinds, it still remains focused on pursuing automation and reducing its reliance on labour. He also hopes to build on the reputation of the clean-room gloves business as a "technological front-runner".

"On the other hand, our in-house R&D team continues to monitor industry trends and develop new products that will enable us to venture into untapped markets, including the food processing, pharmaceutical and surgical glove segments," he said.

Riverstone is currently in Phase 6 of its expansion plan, which involves raising capacity by up to 1.4 billion, to produce 10.4 billion pieces of gloves per annum by Q4 this year. This will alleviate the current supply crunch, Mr Wong added.

In Phases 7 to 9 of its expansion plan, it aims to grow its production capacity to 14 to 15 billion pieces of gloves by FY2023. Riverstone also has a three-year expansion plan at its a new production site in Taiping, Malaysia.

Shares of Riverstone closed at S$4.21 on Wednesday, up 5.51 per cent before the results announcement.