Top Glove swings back to black with RM30.3 million Q2 profit 

[SINGAPORE] Malaysian glove manufacturer Top Glove returned to the black with a net profit of RM30.3 million (S$9.1 million) for its second quarter ended Feb 28, 2025, reversing from a net loss of RM51.2 million in the year-ago period.

This translated into a basic earnings per share (EPS) of 0.38 sen, from a basic loss per share (LPS) of 0.64 sen for Q2 of FY2024.

On Thursday (Mar 20), the group attributed its improved performance to a sustained uptrend in glove orders on the back of recovering global demand, as well as trade diversions resulting from US tariffs on Chinese glove exports, which spurred continued growth in its sales revenue. 

“The sales volume in the second quarter was down by 9 per cent as the US tariffs on the glove imports from China had an impact on our sales volume in Q1 and Q2, and to both US and Europe,” said Lim Cheong Guan, the group’s managing director, at a results briefing.

He attributed the decline in Q2 sales volume to a much higher sales volume to Europe in Q1. The higher sales were due to Chinese players focusing more on the US market instead to maximise sales before tariffs came into effect.

Although sales volume was softer, the glove maker said it achieved good profit margins supported by cost pass-through effects and because it was able to command better pricing in certain regions. 

Moreover, improved production efficiency also contributed to greater profitability, it added. This was driven by better utilisation rates from higher orders over past quarters, which helped to optimise costs.

Lim noted that Top Glove’s overall Q2 FY2025 sales volume is still 6 per cent higher compared to that of Q4 FY2024, “indicating continuous outward momentum”.

Lower raw material costs, which had fallen from the previous quarter, also accounted for the enhanced performance, the group noted. Natural rubber latex concentrate prices had declined by 1 per cent to an average price of RM6.80 per kg and nitrile latex prices had dropped 8 per cent to US$0.86 per kg.

Its revenue for the quarter was RM883.7 million, up 61 per cent from RM 550.3 million in the year-ago quarter. 

For the first half, the group’s net profit stood at RM35.8 million, up from a net loss of RM108.9 million in the previous corresponding period. Its half-year basic EPS stood at 0.45 sen, against a basic LPS of 1.36 sen for H1 FY2024.

Its H1 revenue climbed around 70 per cent to RM1.8 billion from RM1 billion the year prior.

Optimistic outlook

The glove maker projected an optimistic outlook, with improving market conditions expected to drive sustained demand growth. It anticipates continued build-up in its order book, fuelled by strong order inflows.

Trade rerouting driven by US tariffs is projected to lead to higher utilisation rates. US orders are expected to resume in the coming months when stocks have been depleted, it added.

While the group acknowledged that Chinese manufacturers with aggressive pricing strategies for nitrile gloves could pose competition in non-US markets such as Europe, it is confident that it can mitigate this challenge as its diversified portfolio allows it to switch between natural rubber and nitrile glove production.

Lim is confident that growth will improve as costs continue to decrease. “Raw material prices are expected to decrease gradually, which will have softened some of the price combination impact, both for the natural rubber and nitrile rubber price. We expect the price in April to be lower than that in the month of February.”

Additionally, the glove manufacturer will also continue to reopen temporarily closed factories once current utilisation reaches around 70 per cent, and will aim to increase its running capacity by 10 billion pieces by the end of FY2025.

Shares of Top Glove ended Thursday unchanged at S$0.275.