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KUALA LUMPUR (May 20): Driven by surges in demand on medical gloves, Supermax Corp Bhd saw its net profit jump 106.9% to RM72.34 million for its third quarter ended March 31, 2020 (3QFY20) compared with a net profit of RM37.96 million a year ago.

Quarterly revenue grew 23.8% to RM447.27 million compared with RM385.49 million last year.

In a filing statement, the glove manufacturer said that newly added production capacity, lower production costs, higher average selling pricing and favourable exchange rates are the four main reasons that have contributed to the stellar financial performance.

Specifically, it said that nitrile and natural rubber material prices have decreased by 7.3% and 2.5% respectively quarter-on-quarter (q-o-q), while the US dollar has strengthened against the ringgit by 0.36% q-o-q.

In the nine months ended March 31, 2020 (9MFY20), Supermax's cumulative net profit rose 15.89% to RM125.96 million from RM108.69 million in the previous corresponding period, while total revenue grew 8.02% to RM1.2 billion from RM1.11 billion.

In terms of prospects, the company said that its outlook is expected to remain strong for at least the next 1.5 to two years, while a vaccine against Covid-19 is still under development.

Supermax added that it is seeing the emergence of new consumers and new consumption not previously seen, as medical gloves have expanded beyond healthcare and front-line workers to also include the general public which has boosted demand.

"Our usual four-month working inventory at our distribution centres was sold within six weeks and at higher ASPs (average selling prices)," it said.

The company said it is building three new factories in Meru, Klang to capitalise on the exponential demand growth.

Construction work has already commenced on two plants and work on a third plant would commence soon.

The three plants are expected to add 12 billion pieces of additional capacity per annum to 38.18 billion pieces by calendar year 2022.

The company said a total of RM715 million has been budgeted as capital expenditure to boost production capacity.

Shares in Supermax traded 8% or 34 sen higher to close at a record high of RM4.59 today, giving it a total market capitalisation of RM5.93 billion. The counter saw some 27.26 million shares change hands.

Year-to-date, the glove manufacturer has surged 230% amid the generally positive outlook for the glove sector.

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