KUALA LUMPUR: Top Glove Corp Bhd recorded net loss of RM130.59 million in the third quarter (Q3) ended May 31, 2023 from net profit of RM15.29 million last year.
The company's revenue in Q3 2023 falling to RM530.62 million, down from RM1.49 billion in the same quarter last year.
Amidst a challenging business landscape, the company's overall operating performance improved as loss after tax reduced by 23 per cent from the previous financial quarter, attributed to an increase in glove ASPs of six per cent, coupled with quality and cost optimisation initiatives to streamline operations.
The measures employed include decommissioning obsolete production lines and temporarily stopping production at 17 out of its 49 factories, in light of the softer global glove demand which the glove industry continues to contend with.
The decommissioning of production lines eases the company's production capacity by five billion pieces of gloves, bringing its total production capacity to 95 billion pieces of gloves.
Top Glove managing director Lim Cheong Guan said while the company may be in a loss position, it is encouraging that the quantum of operational losses has reduced from the previous quarter.
"Guided by our six point turnaround strategy, we will continue to navigate the challenging business environment. The recent workforce rationalisation exercise undertaken following the temporary stopping of production at some factories to reduce the glove oversupply situation, was an important step towards the group's continual endurance and competitiveness in the long term," he said.
Meanwhile, Lim said while there has been oversupply and customer stockpiling over the past two years, it is important to note that glove consumption itself has not decreased.
On the contrary, he said glove consumption has gone up post pandemic, on the back of elevated hygiene and health awareness.
"As customers' and manufacturers' glove inventory is close to depletion, replenishment activity is expected to commence in the second half of calendar year 2023, spurring an uptick in glove demand.
"With this we are hopeful of seeing a steady improvement and better days ahead," he added.