CAREPLS (0163) CAREPLUS GROUP BHD 3Q net profit drops 80% to RM8.4m on lower utilisation rate of production capacity and declining ASP

CAREPLS (0163) CAREPLUS GROUP BHD 3Q net profit drops 80% to RM8.4m on lower utilisation rate of production capacity and declining ASP

KUALA LUMPUR (Nov 26): Careplus Group Bhd's net profit declined 80.46% to RM8.37 million in the third quarter ended Sept 30, 2021 (3QFY21), from RM42.86 million a year earlier, due to a lower utilisation rate of its production capacity following Movement Control Order restrictions.

Earnings per share fell to 1.54 sen from eight sen, the glove maker's Bursa Malaysia filing showed.

Quarterly revenue slipped 17.82% to RM100.84 million from RM122.71 million amid lower average selling price (ASP) due to increased industry competition from existing glove manufacturers and newcomers, the group said.

On a quarter-on-quarter basis, the group's net profit declined significantly from RM105.08 million reported in the immediate preceding quarter, while revenue fell from RM249.05 million.

For the cumulative nine months ended Sept 30, 2021, Careplus' net profit jumped 195.47% to RM236.99 million from RM80.21 million while revenue came in higher by 70.72% to RM591.22 from RM346.30 million.

Moving forward, the group said that in line with the growing global rubber glove demand, it will continue its expansion plans to grow its production capacities.

"The group presently has 39 production lines with an annual capacity of 6.78 billion pieces of gloves.

"Due to the Enhanced Movement Control Order and recent temporary closure of factories, two additional lines will only be completed by the end of the year and the installation of an additional 10 lines is delayed until 2022, with another four lines to be installed by 2023.

"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 2023," it said.

Shares in Careplus settled 25 sen or 25.77% higher at RM1.22, giving the group a market capitalisation of RM689.59 million. Year to date, the stock has fallen 39% from RM2.00 on Jan 4.

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