Riverstone’s Q1 net profit drops 79.2% as demand for healthcare gloves normalises

MALAYSIAN glove maker Riverstone Holdings on Tuesday (May 10) posted a net profit of RM108.7 million (S$34.5 million) for the first quarter ended Mar 31, 2022, about one-fifth of the RM522.7 million net profit it booked in the year before.

Average selling prices of healthcare gloves have come off the historic highs of Q1 2021. With the majority of the world adopting an endemic approach to Covid-19, demand for personal protection equipment, including the group’s healthcare examination glove products, has normalised, the group noted in its bourse filing.

The normalisation trend has been evident since Q4 2021 and has carried through Q1 2022, it added.

Revenue was RM402.3 million, down from RM1 billion. Gross profit fell to RM154.5 million from RM708.3 million.

Cash and cash equivalents that stood at RM1.7 billion at the end of March will be partially used for the group’s expansion plans, which were delayed in 2021. The group’s next phase of expansion plans in 2022, for production lines on existing land, will increase glove production capacity by 1.5 billion pieces through 7 production lines. This will make for an annual output of 12 billion pieces of gloves.

Riverstone acquired an additional parcel of industrial land in Bukit Beruntung in Selangor in January 2021. It spans 6,740.76 square metres, and will support the expansion of production capacity for cleanroom gloves as well as its operations.

Both the average selling prices and volume of cleanroom gloves have remained similar to that of the previous quarter, the filing noted.

Wong Teek Son, executive chairman and chief executive officer of Riverstone Holdings, said that the demand for such gloves will continue to grow as more applications are being manufactured in cleanroom environments.

“As a market leader for cleanroom gloves, we work hand-in-hand with our clients, who are global leaders in their respective fields, to develop these gloves to their very exacting requirements. We will continue to improve on our cleanroom glove production capabilities through research and innovation,” he added.

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The counter closed at S$0.750 on Tuesday, down S$0.005 or 0.66 per cent, before the announcement was made.