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KUALA LUMPUR, March 16 ― Top Glove Corporation Bhd registered a net loss of RM164.67 million in the second quarter of financial year 2023 (2Q FY2023) ended February 28, 2023, compared to a net profit of RM87.55 million posted in 2Q FY2022.

Its revenue also fell to RM618.01 million from RM1.48 billion a year ago.

On a half-year basis, the company’s revenue declined to RM1.25 billion in the first half of FY23 (1H FY2023) from RM3.09 billion in 1H FY2022.

In a statement to Bursa Malaysia today, Top Glove said its financial performance had continued to be impacted by headwinds which have weighed heavily on the glove industry.

“Destocking activities persisted, driven by excess customer inventory, resulting in a softer order book,” it said.

It added that the situation was also aggravated by the ongoing glove oversupply situation, combined with the lack of customer urgency to place orders in light of shorter delivery times from lower manufacturer utilisation.

“Meanwhile, rising production costs which the group was unable to share out with customers due to moderating average selling prices (ASPs) also contributed to the muted financial results,” it said, noting that customers’ glove inventory levels are moving closer to normality.

However, while sales have started to pick up, not all orders received will prove feasible due to lower price points, the glovemaker said.

As the glove industry faces losses coupled with escalating costs, Top Glove said that the industry has started to revise selling prices upward from February 2023, which is a necessary step towards the industry’s eventual recovery and sustainability.

Managing director, Lim Cheong Guan commented that the glove industry has been experiencing an extremely challenging year.

“Due to the perfect storm of rebalancing demand and supply, coupled with softer ASPs and cost increases, the financial results delivered will not be representative of the company’s or industry’s actual potential.

“However, this is a temporary phase that we will have to weather after two years of elevated pandemic-driven glove demand,” he said.

To mitigate the effects of the headwinds encountered, the company will continue to implement efficiency enhancement and cash conservation initiatives aimed at driving recovery and improving their bottom line, while increasing ASPs to offset rising costs, said Lim.

He noted that the challenging and competitive business landscape is expected to continue throughout 2023, however, the long-term view of the industry prospects is still promising.

“We are under no illusion and remain mindful that the market will continue to equilibrate in the near term.

“Nonetheless, we believe that the glove industry will recover in due course as its fundamentals remain robust and unchanged,” he said. ― Bernama