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 CAREPLS 0163 CAREPLUS GROUP BERHAD records net loss for 1Q due to decline in ASP and lower sales orders

KUALA LUMPUR (May 27): Glove maker Careplus Group Bhd recorded a net loss of RM37.7 million for the first quarter ended March 31, 2022 (1QFY22), plunging from a net profit of RM123.5 million a year prior due to a decline in average selling price (ASP), lower sales order from key customers, higher raw material prices and hike in utilities costs.

According to the group’s bourse filing on Friday (May 27), revenue fell by 65.9% to RM82.3 million from RM241.3 million while earnings per share came in at 6.64 sen compared with 22.98 sen previously. It did not declare any dividends.

"This (the decline in ASP, lower sales orders, higher raw material prices and hike in utilities costs) is further compounded by labour shortages and low utilisation rate of existing production capacities that contributed to production inefficiency losses," said Careplus in the financial results statement released on Friday.

Looking ahead, the group said that the outlook is challenging as it navigates the uncertainty of gloves ASP, rising cost structure and geopolitical tensions.

It said that it will focus on securing new large orders to improve utilisation rates of production lines and place greater emphasis on cost management.

In the current quarter the group said it had 43 production lines with an annual capacity of 7.62 billion gloves. To fulfil the existing labour shortage, the group is also working closely with regulators to ensure gradual recruitment of new foreign workers by the end of 2022.

Careplus also expects to install an additional 4 production lines by the end of 2022 with the on-boarding of these new workers.

"Barring any unforeseen circumstances, the group expects to have 55 production lines in operation with an annual capacity of 10.06 billion pieces of medical and surgical gloves by 2025," it said.

Shares in Careplus closed 0.5 sen lower at 56.5 sen on Friday, giving it a market capitalisation of RM 320.96 million.


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