KUALA LUMPUR (Feb 16): Both Supermax Corp Bhd and Kossan Rubber Industries Bhd slipped into losses for the financial quarter ended Dec 31, 2022, as the operating landscape gets harsher as a result of the continued fall in average selling price and capacity glut.

Kossan warned of “severely challenging” times ahead in its result announcement, pointing out that the headwinds, including higher energy and labour costs, will continue in 2023.

Meanwhile, Supermax foresees competition to remain intense and will eat into profitability, while demand will continue to “moderate from the record highs”.

Besides the shrinking sale volume, Supermax, which posted a net loss of RM108 million in its second financial quarter ended Dec 31, 2023 (2QFY23), was also bogged down by an unrealised forex loss of RM55.2 million due to the weakening of the US dollar against the ringgit.

Supermax posted a loss per share of 4.07 sen in the quarter under review, against earnings per share of 1.83 sen a year ago, the group’s bourse filing showed.

Quarterly revenue was down 67% year-on-year (y-o-y) to RM174.79 million from RM523.54 million previously.

The dismal performance dragged the group’s performance for the first six months of FY2023 to a net loss of RM102.36 million, versus a net profit of RM686.37 million a year ago. Revenue contracted 78.64% y-o-y to RM422.75 million from RM1.98 billion previously.

Over at Kossan, it turned to a loss of RM2.49 million or 0.1 sen per share in the fourth quarter ended Dec 31, 2022 (4QFY2022).

In view of the harsh operating landscape, Kossan said it has placed its near-term expansion plans on hold subject to the prevailing demand-supply situation. Shelving expansion plans has become a trend in the glove industry due to capacity glut globally.

Despite the loss-making quarter, Kossan declared an interim dividend of 2.5 sen per share, payable on March 22, with an ex-date on March 7.

Kossan’s quarterly revenue slumped to a five-year low of RM481.45 million — down almost 48% year-on-year (y-o-y) from RM924.56 million, the glove maker’s bourse filings showed.

Compared to a year ago, it posted a net profit of RM218.67 million or earnings per share of 8.57 sen per share in 4QFY2021.

For FY2022, Kossan’s net profit shrank to RM156.6 million, barely 5.5% of the RM2.86 billion that it made in the previous year. Annual revenue contracted 65% to RM2.32 billion from RM6.63 billion a year ago.

Shares price of Kossan closed five sen or 4.63% higher at RM1.13, giving the group a market capitalisation of RM2.89 billion. Shares in Supermax rose 3.5 sen or 4.55% to 80.5 sen, translating into a market capitalisation of RM2.19 billion.