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Careplus said the strong revenue was due to higher glove sales, higher utilisation rate and higher selling prices as a result of surge in demand due to the pandemic. Its net profit included the 50% sharing of profit earned from the joint venture between Careplus M and Ansell.

KUALA LUMPUR: Careplus Group Bhd reported a strong set of financial results in the third quarter ended Sept 30,2020 as its profitability and revenue surged on the strong demand for gloves due to the ongoing Covid-19 pandemic.

It reported on Friday its net profit surged to RM42.85mil, which wa a stark contrast to the net loss of RM4.93mil a year ago. Its revenue of RM122.70mil was 45.5% higher than the RM84.34mil a year ago. Earnings per share were eight sen compared with loss per share of 0.93 sen.

“The group's revenue has increased on the back of higher selling price and better capacity output. The group's profit before tax and profit attributable to owners of the company improved significantly by 890.17% and 968.23% respectively, ” it said.

Careplus said the strong revenue was due to higher glove sales, higher utilisation rate and higher selling prices as a result of surge in demand due to the pandemic. Its net profit included the 50% sharing of profit earned from the joint venture between Careplus M and Ansell.

For the nine months, it said revenue increased by 35% to RM346.30mil from RM256.38mil in the previous corresponding period.

“This is mainly due to increase in selling prices arising from the surge in demand due to the Covid-19 pandemic and higher sales quantity, ” it said.

Its net profit of RM80.21mil compared with net loss of RM6.53mil a year ago was due to higher sales volume, average selling price and better production efficiency.

It included a one-off gain of RM15.4mil from the disposal of 50% equity interest in Careplus M for the joint venture with Ansell in the second quarter. A larger tax provision of RM8.85mil has been provided for as a result of higher profits

On the prospects, Careplus said it was running 29 lines with an annual capacity of 4.62 billion pieces of gloves.

“We are targeting to install four new lines by the end of this year, another 15 new lines by mid-2021, with an additional nine lines in the planning stage to be completed by end 2021.

“As a result, the group will have 57 production lines with an annual capacity of 10.5 billion pieces of medical and surgical gloves by end 2021.

“The group has also put in place to increase surgical gloves packing facilities from 72 million pairs to 288 million pairs annually by end 2021.

“We will be investing RM10mil to automate our new lines to reduce our dependency on production workers. At the same time, we will be renovating our newly purchased budget hotel to be converted into workers’ hostel (pending approval by the authorities) to attract more local workers to join us, ” it said.

https://www.thestar.com.my/business/business-news/2020/10/23/careplus-3q-net-profit-surges-to-rm428m-as-glove-demand-spikes

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