PETALING JAYA: Supermax Corp Bhdâs net profit for its third quarter ended March 31, 2021 jumped more than 14 times to RM1.01 billion from RM71.06 million in the same quarter of the previous year, mainly due to the surge in demand for gloves amid the Covid-19 pandemic.
Revenue for the quarter almost quadrupled to RM1.9 billion from RM447.25 million previously.
For the nine months, Supermaxâs net profit jumped 22 times to RM2.86 billion from RM125.97 million in the corresponding period of the previous financial year. Revenue for the period increased fourfold to RM5.29 billion from RM1.20 billion reported previously.
The group declared a special single tier dividend of 13 sen per share for the current financial year ending June 30. Up to now, Supermax has declared dividends of 16.8 sen in respect of the current financial year.
In terms of capacity expansion in Malaysia, Supermax completed the commissioning of the remaining production lines in Block B of Plant 12 during the preceding quarter, adding 2.2 billion to the groupâs annual installed capacity.
âWe are seeing a full-quarter contribution in the quarter ending March and going forward. We are building five glove manufacturing plants concurrently and scheduled for completion progressively between now and next year. The new plants will add 22.25 billion new capacity bringing the groupâs total capacity to 48.42 billion gloves by the end of 2022. The group will invest a total capital expenditure of RM1.39 billion for the new plants,â the glove maker said in a statement.
The group would have recorded an even stronger performance were it not for the temporary closure of its Meru plants for sanitisation and deep cleansing after the detection of several Covid-19 cases among the foreign workers. There was a loss of production output in February at the Meru plants when workers were put on mandatory quarantine. A donation of RM75 million to the government in fighting the Covid-19 pandemic was taken up during the current quarter.
The group said Covid-19 vaccinations have commenced in an increasing number of countries and would expect glove demand and consumption to moderate. The company believes that it will likely be gradual and not drop sharply due to the structural change in consumption, such as new consumption, new customers and greatly heightened healthcare and hygiene awareness.
Supermax is reinvesting the earnings derived from its distribution centres into the respective countries where Supermax operates. The capital expenditure earmarked for the US is US$300 million (RM1.24 billion) for phase 1 and US$250 million (RM1.03 billion) for phase 2 making a total of US$550 million (RM2.26 billion).
âCurrently, the company is working with various government agencies in the US to identify a suitable manufacturing site, negotiate with various agencies, counties and local governments for providing the full infrastructure that the company needs for the production of medical gloves and to provide various supports from local institutions such as on R&D, employee training and other support services that the company needs.
âWe have received approval from a state government, capital investment tax credit with projected capital investment of US$482 million (RM1.98 billion). We are currently working with another state for similar or better capital investment incentives before making the final decision on the state and the shortlisted site where the project will be located,â said the group.
Amid heightened competition among gloves manufacturer worldwide, the group is confident of navigating the forthcoming intense competition globally with its own brand manufacturing business model and established distribution networks.
