Supermax Corp Bhd has recorded its first quarterly financial loss due to the continued fall in glove average selling prices (ASPs) and rising per unit costs.
The glove maker posted a net loss of RM108.07 million for the second quarter ended Dec 31, 2022 (2QFY23) on RM174.79 million in turnover, it said in an exchange filing yesterday.
In the same period last year, the company posted a net profit of RM47.84 million on the back of RM523.54 million in turnover.
The company said the fall into a loss-making position was made worse by a weakening of the USD against the Ringgit which led to significant unrealised forex losses.
In the filing, Supermax outlined six negative factors in the current challenging operating environment, including ASPs continuing to slide lower in the face of intense market competition.
It said its sales continue to be adversely impacted as the Withhold Release Order (WRO) imposed by the US Customs and Border Protection (USCBP) in October 2021 remains in place, effectively hampering efforts to import new lower cost shipments to average down inventory costs.
The company said broader global market demand is slow as a result of over-stocking during the peak pandemic times.
Supermax is also incurring increased operating costs, including high energy costs, as well as increase in minimum wages.
Commenting on its prospects, it said that it expects to see the rubber glove industry continuing to consolidate with ASPs and demand continuing to moderate from the record highs.
In the foreseeable future, it said the market will remain weak, competition continues to be intense and profitability adversely impacted.
The counter yesterday closed at 80.5 sen, giving Supermax a market capitalisation of RM2.19 billion. – TMR