Sri Trang Agro-Industry Q2 earnings plunge 90.4% on softer demand
Ry-Anne Lim
RUBBER company Sri Trang Agro-Industry (STA) on Thursday (Aug 10) posted earnings of 110 million baht (S$4.2 million) for the second quarter ended Jun 30, down 90.4 per cent from earnings of 1.1 billion baht in the corresponding period last year.
Revenue sank 24.1 per cent year on year to 21.2 billion baht in Q2 – fuelled by a 23.9 per cent decline in revenue from natural rubber to 17.7 million baht due to a lower average selling price (ASP).
Sales volume of the natural rubber products segment – comprising technically specified rubber, ribbed smoked sheet and concentrated latex – also fell in that period as STA “faced difficulty in sourcing raw materials as a result of El Nino, which caused a prolonged wintering period in all regions of Thailand”, said the group in a bourse filing.
The natural rubber industry remains “weighed down by a slowdown in demand” as tire producers are still left with a high level of inventory, added STA.
Meanwhile, revenue from gloves, which accounted for 22.6 per cent of total revenue, decreased 25.2 per cent year on year to 4.8 million baht on a lower ASP, even as sales volume grew.
Moving forward, STA highlighted that natural rubber prices for the rest of 2023 will be heavily influenced by demand from tire producers and their level of inventory, as well as macroeconomic uncertainties.
Shares of STA closed at S$0.56 on Thursday, down 9 per cent or S$0.055, before the results announcement.
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