CATALIST-LISTED disposable gloves manufacturer UG Healthcare Corp's plans to tweak some of its production lines have been delayed by the Covid-19 epidemic, the company disclosed on Thursday, even as its half-year earnings took a hit from rising costs.

Net profit was down by 35.9 per cent year-on-year to S$846,000 for the six months to Dec 31, 2019, even as revenue grew by 28.5 per cent to S$53.2 million on the back of higher production efficiency and expanded distribution networks that drove South American and African sales.

The decline in the bottom line was due in part to administrative expenses to boost distribution in Britain, Brazil, China and Nigeria, the company said in its statement, as well as the higher take-up of trade facilities as sales increased, which drove up finance costs.

Meanwhile, the share of profits from UG Healthcare's associates in Germany and the United States fell from S$331,000 to S$255,000 in the half-year.

Earnings per share stood at 0.43 Singapore cent for the six months, down from 0.68 cent previously. Meanwhile, net asset value was 21.88 Singapore cents a share against 22.43 cents as at June 30, 2019.

While UG Healthcare had started a year-long major upgrading of some production lines in June 2019 in tandem with plans to raise annual production capacity, executive director Lee Jun Yih said that progress has seen slight delays amid the global coronavirus outbreak.

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"Due to the recent outbreak of the coronavirus, we have been receiving a surge in orders for latex and nitrile gloves. This delayed our plan to modify certain production lines slightly.

"Nevertheless, we are on track to achieve optimal utilisation with the existing production capacity of 2.9 billion gloves per annum in this current financial year, before we embark to construct new production lines. The additional 300 million gloves annual capacity is planned to come on stream in the financial year ending June 30, 2021," he said.

UG Healthcare will also press on with building its marketing and distribution infrastructure for its "Unigloves" brand in the key downstream markets in Europe, Brazil, China and Africa, Mr Lee said.

No dividend was recommended, which the board said was "to conserve cash for expansion and growth".

UG Healthcare shares closed up half a cent or 1.82 per cent to S$0.28 on Thursday before the results were announced.