RUBBEREX Corp (M) Bhd noted exceptionally strong demand for gloves enabling it to post an all-time-high quarterly net profit of RM22.96 million, up 858% year-on-year (YoY) for its second quarter ended June 30, 2020 (2Q20), amid the Covid-19 pandemic.

The rubber glovemaker’s revenue for the quarter rose 58% YoY to RM88.1 million on the back of the strong demand for disposable gloves.

Earnings per share for the quarter rose 8.69 sen from 0.95 sen for the same period last year.

The company stated a better product mix, improved efficiencies achieved through higher capacity utilisation, favourable exchange rates, as well as higher glove average selling prices (ASP) particularly from its nitrile disposable glove division contributed to the stellar 2Q financial performance.

For the first half of the year ended June 30, 2020 (1H20), cumulative net profit jumped 639.74% YoY to RM32.22 million, while revenue rose 45.65% YoY to RM154.53 million.

Rubberex group MD Khoo Chin Leng noted that production lines are currently operating at full capacity with orders filled up to the middle of 2021 and the current favourable ASP showing no signs of abating in the near term.

He is confident greater health and safety awareness among the population will further fuel the demand for gloves which have become an essential item in our daily lives.

With the record sales and margins achieved, Rubberex had proposed to undertake a bonus issue of up to 554.85 million new Rubberex shares on the basis of two bonus shares for every one share held. The entitlement date will be determined and announced later.

Moving forward, Rubberex remains focused on its nitrile disposable glove division, which is currently operating at full capacity.

“The improved performance in the current quarter was mainly driven by higher ASP of nitrile disposable gloves in 2Q compared to 1Q.

“Higher capacity utilisation and improved operational efficiencies across the group’s disposable, household and industrial divisions also contributed to the improved revenue and profits,” it said in a Bursa filing yesterday.

The group’s favourable performance is expected to continue for the rest of 2020 as orderbooks for the existing nitrile disposable glove lines have been filled up until 1H21.

Rubberex added its new capacity, which is expected to commence later this year, should also contribute to the group’s earnings in 4Q20 onwards.

Its share price fell 15 sen or 2.6% to RM5.60 at closing yesterday after the 2Q results news.