KUALA LUMPUR: Kossan Rubber Industries Bhd's returned to the black in the first quarter ended March 31, 2024 (1Q24) with a net profit of RM31.45 million compared to a net loss of RM24.25 million a year ago.
This was driven by contributions from its gloves division, Kossan said today.
Its quarterly revenue increased 14.42 per cent to RM451.63 million from RM394.71 million previously.
As a result, the group registered an earnings per share of 1.23 sen against a net loss of 0.95 sen in 1Q23.
Its gloves division's revenue increased by 19.56 per cent to RM379.63 million in 1Q24 from RM317.54 million in 1Q23 due to the higher quantity sold.
Kossan said the persistent supply-demand gap facing by the glove industry, coupled with the pressure from international competitors on average selling prices, are anticipated to persist throughout the financial year 2024 (FY24).
The challenging operational landscape is further impacted by the increase in raw material and natural gas prices in 2Q24.
"The group anticipates the raw material price will have a minor increase throughout FY24, while the natural gas price will depend on the fluctuation in crude oil price.
"Despite these obstacles, the long-term outlook for glove demand remains positive, driven by stricter standards and increased hygiene awareness in medical and industrial sectors.
"The current industry consolidation and capacity adjustment have also eased the challenging situation," it added.
Kossan said it maintains its commitment to strengthening its glove division despite the prevailing operational challenges.
The group said its primary focus remains on enhancing cost-efficiency by accelerating the automation and digital solutions, providing ongoing human resources training, and reinforcing its management systems,
This will enable it to reduce its production costs and overcome existing manpower challenges, Kossan added.
"Despite the challenging landscape mentioned, the group is cautiously optimistic about its performance for FY24," it said.