Wednesday, December 15, 2010

#Flash* Top Glove 1Q earnings dn 44% to RM36.05m

KUALA LUMPUR: TOP GLOVE CORPORATION BHD []'s earnings fell 44% to RM36.05 million for the first quarter ended Nov 30 from RM65.21 million a year ago as it was impacted by the high latex prices and a weak US dollar.

It said on Wednesday, Dec 13 revenue rose 4% to RM491.51 million from RM472.30 million while earnings per share were 5.83 sen compared with 10.76 sen.

'The three months to Nov 30, 2010 has been a challenging quarter for the group due to headwinds such as persistently high latex prices and the continued weakening of the US dollar coupled with the time lag in passing on the higher costs to its customers, which have affected the group's profit margins,' it said

Top Glove said average latex prices rose by 57% from RM4.58 per kg in 1Q2010 to RM7.20 per kg in 1Q2011 while the average US dollar weakened against the ringgit by 9.3% (RM3.43 in 1Q2010 versus RM3.11 in 1Q2011).

The world's largest glove manufacturer said demand for rubber gloves, which has been normalising coupled with the excess capacity situation, have also impacted the industry.

It also said customers kept their inventory level at a minimum level due to high selling prices of latex gloves, which reflected the increasing cost of latex prices.

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