By Ying Xian Wong
Shares of the world's biggest glove maker, Malaysia's Top Glove, jumped after it said the industry seems to be turning a corner and reported narrowed losses.
Top Glove rose by as much 7.5% on Wednesday afternoon before paring gains to sit 6.9% higher, trimming 12-month losses to 7.1%.
Like other glove manufacturers, the company has been grappling with a supply glut and higher competition after a peak in demand fueled by the onset of the pandemic waned.
Top Glove said that it reduced its fiscal second-quarter net loss to 51.2 million ringgit ($10.8 million) from MYR164.7 million a year ago as sales volumes improved. Better plant utilization, cost controls and quality optimization initiatives also boosted the results, it said.
Quarterly revenue fell 11% on year to MYR550.33 million, but Top Glove said the 18% rise in sales volume is "an encouraging sign of continual and significant strides towards recovery."
The company is upbeat on the mid- to long-term outlook for the glove industry, as gloves remain an essential item, said Lim Cheong Guan, Top Glove's managing director. He sees scope for the strong momentum to continue as customers keep replenishing their depleting stockpiles.
"We continue to see signs of the market rebounding and believe our business will normalize in due course as glove industry fundamentals remain robust and unchanged," Lim said, adding that he is confident that Top Glove will return to profitability in the second half of its fiscal year.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
March 20, 2024 03:53 ET (07:53 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments