Supermax Corp Bhd, an investment holding company, is an international manufacturer, distributor, and marketer of high-quality medical gloves. It offers various types of latex gloves, which are exported to over 155 countries around the world. The company is organized into the following operating segments, Investment Holding, Manufacturing of Gloves, Trading of Gloves and Others. It has operational footprints across America and Canada, Europe and Asia.
It posted an annual net loss of RM149.45 million for its financial year ended June 30, 2023 (FY2023), against an annual net profit of RM718.91 million in FY2022, the reason for the same can be quoted as earnings were weighed by lower sales and average selling price (ASP) for gloves, amid persistent oversupply in the market and low demand in the broader global market.
The group’s earnings were also hit by the loss of sales due to the Withhold Release Order (WRO) imposed by the US Customs and Borders Protection in October 2021, which remains in place, as well as increased operating costs amid higher utility costs.
Supermax said that the oversupply situation will be cured soon as smaller players have exited the market while some of the larger players scale back their expansion. It has itself shut down four of its plants over the last 2 years, while then plan to build six new plants suing modern technology in an efficient way is still in line considering the current market demand situations. Nevertheless, it expects gloves ASPs to remain suppressed, saying a meaningful market recovery may only take place sometime late in 2024.
Supermax, does not expect to see a significant improvement in performance in the near to medium term owing to the high volume of high-priced stocks at its overseas distribution centres.
Various steps are taken to cure the situation including the construction of its US plant, which can help to re-shore or shore-up domestic production to ensure security of supply especially in times of crises.
Supermax shares fell one sen or 1.26% to close at 78.5 sen on Tuesday, giving the group a market capitalisation of RM2.14 billion.