16/11/2023 (Malaysia) - Kossan Rubber Industries Bhd has reported a notable increase in net profits for the third quarter ending September 30, 2023. The net profit rose to RM40.97 million, up from RM23.26 million in the same quarter of the previous year. This improvement is primarily attributed to higher earnings from its glove and technical rubber products (TRP) divisions.
However, the company's revenue showed a decline, falling to RM403.48 million from RM560.52 million. This drop was due to lower contributions from all its business segments, as stated in a notification to Bursa Malaysia.
The glove division's performance was particularly strong, with a pre-tax profit (PBT) of RM31.21 million in the third quarter of 2023, a significant increase from RM1 million in the corresponding quarter last year. This surge was credited to better cost control and lower raw material costs.
The TRP segment also showed impressive growth, with its PBT increasing by 94.7% to RM10.98 million in the third quarter of 2023, up from RM5.64 million in the same period in 2022. The increase was due to higher margins in infrastructure product lines.
For the cumulative nine months of 2023, Kossan's net profit declined to RM13.42 million from RM159.36 million in the previous year, while revenue decreased to RM1.19 billion from RM1.83 billion. This downturn was a result of reduced revenue across all divisions.
Looking ahead, the TRP division is expected to perform well in the fiscal year 2023, bolstered by a gradual increase in global economic activities and infrastructure spending, particularly benefiting the infrastructure and automotive segments.
Despite signs of market stability, the glove sector continues to face challenges due to ongoing supply-demand imbalances, which are expected to affect the operating environment for the remainder of the year. However, Kossan remains optimistic about the long-term demand for gloves, driven by increasing hygiene standards and awareness in the medical and industrial sectors.