Top Glove poised for rebound as volumes continue to grow

Shah Alam, Malaysia – Malaysia’s number one rubber glove manufacturer Top Glove has continued on the recovery track with an encouraging third quarter performance.

Sales for the quarter ended 31 May rose 20% year-on-year to RM637 million (€126 million), while operational loss reduced to RM34 million from a loss of RM118 million reported last year.

Meanwhile, sales volume continued to grow, rising 13% quarter-on-quarter, Top Glove reported 19 June.

Profit after tax rose 152% year-on-year to RM62 million, due in part to gains from the disposal of excess land.

The group said it was emerging from a protracted period of industry-wide glove demand/supply imbalance, moving closer to breakeven.

On a nine-months basis, the group posted sales revenue of RM1.68 billion, marginally lower compared to the first nine months of 2023 fiscal year.

But loss after tax was significantly narrower compared to the year before at RM26 million, a 94% improvement versus the first nine months of 2023.

Raw material prices for third quarter were “on an uptrend,” with the average natural latex concentrate price up by 20% quarter-on-quarter to RM6.77/kg.

The average nitrile latex price rose 16% on a quarterly basis to $0.89/kg, Top Glove reported.

The group linked the “more robust performance” primarily to stronger glove demand as customers replenished their glove inventories following a period of destocking.

As a result, Top Glove said it increased utilisation rates while continuing its ongoing quality and cost optimisation measures to improve the bottom line.

Cost of production also decreased despite a rise in raw material costs, helped by “multiple improvement initiatives,” and pass-through of costs by increasing average selling prices.

With the improved performance, Top Glove said it was ‘poised for a comeback’, noting that it expected the ‘upward momentum’ to further accelerate in the near future for the Malaysian glove industry.

In particular, Top Glove said a high number of ‘foreign gloves manufacturers’ were being included on the US Food and Drug Administration (FDA)’s import alert list.

The group also anticipates improved business opportunities in the US following the impending implementation of higher tariffs on medical gloves from China in 2026.

The higher tariffs, Top Glove said, make it “unfeasible” for Chinese glove makers to continue exporting to the US, while customers there are expected to move away from outsourcing orders to China.

“Top Glove as a major glove exporter to the US is optimally positioned to capture more market share from the potential trade diversion,” the group commented.