KUALA LUMPUR (June 12): Comfort Gloves Bhd, whose share price has soared 270% this year, saw a boost in net profit for its first financial quarter ended April 30, 2020 (1QFY21) thanks to higher productivity in its new and existing lines.
In a filing today, it said net profit for 1QFY21 jumped 94% to RM16.34 million from RM8.41 million previously, backed by higher revenue of RM152.91 million, a 27% increase from RM119.96 million a year ago.
Earnings per share expanded to 2.8 sen in 1QFY21 from 1.5 sen in the previous corresponding period.
“This was mainly contributed from the strengthening of US dollar against the ringgit and lower production cost due to the increase in productivity from existing and new production lines,” the group added.
The rubber glove maker has declared an interim dividend of 1.5 sen per share for the financial year ending Jan 31, 2021, which will be paid on Aug 28, 2020.
Looking ahead, the group said the prospects for the glove manufacturing sector remains strong with increasing demand arising from those switching trends to nitrile gloves. Demand for gloves has especially spiked since the outbreak of the coronavirus, it added.
“With the commissioning of new production lines, we managed to increase the productivity to keep up with a surge in orders in coming quarters. Besides, the higher productivity reduces the production costs and improves our margin."
In view of the coronavirus pandemic, the company expects gloves consumption to increase in the long run due to rising global health awareness.
“With supply shortages in the global market, our marketing team is capitalising on this opportunity to aggressively expand our new customer base for continuous market expansion and future growth,” it said.
Shares of the glove maker shot to its highest ever at RM4.20 on June 1. The counter settled at RM2.93 today for a market capitalisation of RM1.71 billion.