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Supermax posts record quarterly profit of RM399.6m

10 Aug 2020 / 20:50 H.

PETALING JAYA: Supermax Corp Bhd’s net profit for its fourth quarter ended June 30 surged more than 26-fold to RM399.62 million from RM15.06 million a year ago, its best-ever quarterly financial performance since its incorporation, mainly due to an exponential rise in demand for medical gloves and other personal protective equipment (PPE) on the back of the Covid-19 pandemic.

Its revenue surged 147.1% or more than doubled to RM929.12 million compared with RM375.96 million in the corresponding quarter a year ago.

For the full year, Supermax’s net profit quadrupled to RM525.59 million from RM123.11 million, while revenue jumped 39% to RM2.13 billion from RM1.54 billion.

Supermax said due the heightened demand for gloves as the world fights the Covid-19 pandemic, there has been emergence of new consumers and new consumption not previously seen before, and that the group is in an oversold position.

“Since the founding of Supermax, we have adopted the own brand manufacturing (OBM) model whereby we manufacture the products, package and market under our in-house brands. We currently export 55% of production under our own brands via our own distribution centres and 40% through independent distributors. The remaining 5% is for OEM production.

“Due to the current robust demand, we are taking the opportunity to build new relationships with new customers and distributors in anticipation that they will continue with repeat orders post pandemic,” it said in its exchange filing.

Supermax’s products are sold to more than 165 countries, the largest contributor being the Americas which contributed 51% to its revenue in FYE2020. Asia/Oceania and Europe contributed 23% each.

In terms of product segmentation, 72% is from nitrile powder free gloves, followed by 18% from latex powder-free and 7% and 3% from powdered latex and surgical gloves, respectively.

“In terms of capacity expansion, we have put in place expansion plans of building total of five glove manufacturing plants between now and until year 2022 with additional production capacity of 22.25 billion making total of 48.42 billion gloves by end of year 2022. The Supermax group would invest total capital expenditure of RM1.3 billion for the new plants.

“The highest average selling prices have not been reflected this current quarter and we are optimistic that our OBM cum distribution business model will exhibit even healthier performance in the coming quarters,“ said Supermax.

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