KUALA LUMPUR: Hit by higher material costs, glovemaker Kossan Rubber Industries Bhd’s net profit for the first nine months of the year fell 24% to RM67.5 million, despite a 2% revenue growth to RM810.6 million.
For 3QFY11 ended Sept 30, net profit fell 17.1% to RM23.6 million, although revenue rose to RM278.5 million from RM275.6 million. Natural latex prices rose 23.4% to RM8.63 per kg in 3QFY11 from RM6.99 last year, while the price of nitrile or synthetic latex rose 41.6% to RM6.43 from RM4.54 per kg.
Earnings per share fell from 8.93 sen to 7.39 sen for the quarter, and from 27.82 sen to 21.12 sen year-to-date.
The company is optimistic about its prospects. “With the recent drop in rubber prices coupled with higher demand for technical rubber products and gloves, management is positive of the performance in the coming quarters,” Kossan said.
The glovemaker said it plans to grow annual production capacity by 42% to 17 billion pieces over the next two years.
CEO and managing director Datuk Lim Kuang Sia said it is essential for the company to diversify through mergers and acquisitions and that it may consider taking up companies involved in non-rubber products.
As at Sept 30, Kossan had RM65.6 million cash and RM19.2 million in bank borrowings. Short-term borrowings stood at about RM135 million.
This article appeared in The Edge Financial Daily, November 18, 2011.
For 3QFY11 ended Sept 30, net profit fell 17.1% to RM23.6 million, although revenue rose to RM278.5 million from RM275.6 million. Natural latex prices rose 23.4% to RM8.63 per kg in 3QFY11 from RM6.99 last year, while the price of nitrile or synthetic latex rose 41.6% to RM6.43 from RM4.54 per kg.
Earnings per share fell from 8.93 sen to 7.39 sen for the quarter, and from 27.82 sen to 21.12 sen year-to-date.
The company is optimistic about its prospects. “With the recent drop in rubber prices coupled with higher demand for technical rubber products and gloves, management is positive of the performance in the coming quarters,” Kossan said.
The glovemaker said it plans to grow annual production capacity by 42% to 17 billion pieces over the next two years.
CEO and managing director Datuk Lim Kuang Sia said it is essential for the company to diversify through mergers and acquisitions and that it may consider taking up companies involved in non-rubber products.
As at Sept 30, Kossan had RM65.6 million cash and RM19.2 million in bank borrowings. Short-term borrowings stood at about RM135 million.
This article appeared in The Edge Financial Daily, November 18, 2011.
