KUALA LUMPUR (Aug 22): Supermax Corp Bhd’s net profit for the fourth quarter ended June 30 (4QFY22) slumped 96.57% to RM33.05 million from RM962.53 million a year earlier, with revenue dropping 83.99% as the average selling prices (ASPs) and demand for rubber gloves fell from their record highs a year ago, when the Covid-19 pandemic was still rampant.

Revenue for 4QFY22 dropped to RM300.23 million from 4QFY21's RM1.88 billion, Supermax's bourse filings showed. Earnings per share dropped to 1.25 sen from 37.08 sen.

The group proposed a final dividend of three sen per share, to be paid at a date to be fixed if approved by shareholders. This will raise total dividends per share for FY22 to 11 sen — down 20.8 sen from the 31.8 sen it declared for FY21.

Supermax 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, while the Canadian government has suspended orders and deliveries from Supermax.

It also said its profitability was adversely impacted as importers and distributors — including Supermax group’s overseas distribution units — have had to sell high-priced inventory at falling market prices since end-2021. It also blamed increased operating costs and the increase in minimum wages.

For the full year ended June 30, 2022 (FY22), net profit dropped 80.81% to RM732.43 million from RM3.82 billion in the same period last year, as revenue retreated 62.49% to RM2.69 billion, from RM7.16 billion.

Going forward, Supermax is expecting the market to remain weak, with competition continuing to be intense, while profit margins moderate further.

“We expect to see continued major consolidation in the rubber glove industry, as ASPs and demand continue to moderate from the record highs seen at the peak of the Covid-19 pandemic,” it added.

Nevertheless, it said the structural shift triggered by the pandemic will see demand remain at a higher level compared to the pre-pandemic period, and resume at a longer-term upward trend once the current demand-supply disequilibrium rebalances in time.

Shares of Supermax closed 1.5 sen or 1.9% lower at 77.5 sen on Monday (Aug 22), giving the group a market capitalisation of RM2.11 billion. The stock has fallen 46% since the beginning of this year, when it was at RM1.43.