PETALING JAYA: Supermax Corp Bhd posted a net profit of RM13.01 million in its third quarter ended March 31, 2022 (Q3’22), 98.71% lower compared with a net profit of RM1 billion in the previous financial year’s corresponding quarter (Q3’21) due to decline in average selling prices (ASP), the Withhold Release Order (WRO) imposed by the US Customs and Border Protection, selling of high-priced inventory by importers and distributors, higher minimum wage, as well as higher operating costs caused by inflation.
Its revenue decreased 78.95% to RM407.8 million from RM1.94 billion in the corresponding quarter in the previous year.
For the nine months period, its net profit dropped 75.5% to RM699.37 million compared with RM2.85 billion in the same period last year.
Revenue was down 54.87% to RM2.39 billion for the period compared with RM5.29 billion previously.
On prospects, Supermax said global demand and glove selling prices are decreasing as the Covid-19 pandemic transitions into the endemic phase. Many of the major buyers such as governments and large hospital chains are full or near full in terms of personal protection equipment (PPE) stocks after a period of aggressive sourcing and buying. Buying has moderated in tandem with reduced consumption levels.
“We expect to see a continued normalising in the rubber glove business as ASP and demand continue to decline from the highs seen at the peak of the Covid-19 pandemic. Nevertheless, the structural shift triggered by the pandemic will see demand remain at a higher level compared to the pre-pandemic period and resume a longer-term upward trend once a period of consolidation is over,” Supermax said
It added that the vulnerability of disruption of PPE supply chains or over dependence on imports have become the primary concern of governments around the world.
“To address this major concern in countries where Supermax operates, in addition to the capital expenditure that the group is putting into glove manufacturing in Malaysia, we are reinvesting the earnings derived from our distribution centres into the respective countries where Supermax operates.”
On May 16, 2022, various permits to start site clearing, earth works and works below ground were received. Supermax started the ground-breaking of the US plant on May 18.