KUALA LUMPUR (March 26): ADVENTA BHD [] posted a weaker set of financial results for the first quarter ended Jan 31, 2012 with net profit falling 33% to RM2.71 million from RM4.05 million as it was impacted by margin squeeze, foreign exchange loss and higher finance cost.
It said on Monday its revenue slipped 2.2% to RM103.81 million from RM106.19 million while earnings per share were 1.77 sen compared with 2.65 sen.
“The group’s revenue dropped 2% over corresponding quarter due to a reduction in orders for latex examination gloves as many markets are switching to synthetic nitrile material.
“Although the group has new nitrile exam gloves manufacturing capacity, it is insufficient to meet the change in demand,” it explained in the notes to the accounts.
Adventa said the examination gloves segment performed well in comparison with the other segment as nitrile gloves offset the loss in latex examination gloves orders.
“Nitrile gloves continue to increase in usage in developed countries, replacing natural latex gloves. This phenomenon is expected to continue. The surgical gloves segment lagged more than expected, with lower operating margin in comparison. This segment, ever sensitive to currency fluctuation and material cost will improve with more stable latex prices,” it said.
Adventa was more upbeat about the next three quarters as it expected an improvement in sales compared to the first quarter, with more nitrile glove capacity coming on stream.
While it said latex gloves remain weak, it expected the dental gloves segment to maintain its contribution. As for raw materials, it expected prices to stabilise in the third quarter.
It said on Monday its revenue slipped 2.2% to RM103.81 million from RM106.19 million while earnings per share were 1.77 sen compared with 2.65 sen.
“The group’s revenue dropped 2% over corresponding quarter due to a reduction in orders for latex examination gloves as many markets are switching to synthetic nitrile material.
“Although the group has new nitrile exam gloves manufacturing capacity, it is insufficient to meet the change in demand,” it explained in the notes to the accounts.
Adventa said the examination gloves segment performed well in comparison with the other segment as nitrile gloves offset the loss in latex examination gloves orders.
“Nitrile gloves continue to increase in usage in developed countries, replacing natural latex gloves. This phenomenon is expected to continue. The surgical gloves segment lagged more than expected, with lower operating margin in comparison. This segment, ever sensitive to currency fluctuation and material cost will improve with more stable latex prices,” it said.
Adventa was more upbeat about the next three quarters as it expected an improvement in sales compared to the first quarter, with more nitrile glove capacity coming on stream.
While it said latex gloves remain weak, it expected the dental gloves segment to maintain its contribution. As for raw materials, it expected prices to stabilise in the third quarter.
