Supermax: Q2 net profit down 24.5% to RM26.7mil

Supermax Corporation Bhd’s second quarter ended June 30, 2014 with net profit down 24.5% to RM26.76mil from RM35.48mil a year ago.

The group told Bursa Malaysia on Tuesday that revenue for the period was down 27.8% to RM238.1mil from RM330mil a year ago.

Earnings per share for the period stood at 3.93 sen from 5.22 sen a year ago.

For its first half year, its net profit fell 21.4% to RM53.35mil from RM67.88mil a year ago while revenue declined 27.6% to RM470.37mil from RM650.54mil a year ago.
The group said its current quarter performance was affected by the fire at its Alor Gajah plant in Q4 2013 which caused a temporary loss of production output that was only fully resolved, albeit in stages, towards the end of Q2 2014.

“However, while the pre-fire capacity was regained, some capacity was temporarily lost at other factories as the group resumed its scheduled automation programme."

“The current quarter also saw average selling prices declining by between 5% and 20% across the group’s range of products. Nevertheless, we expect to see production levels returning to more normalised levels from Q3 onwards, notwithstanding the continuation of the automation programme, while Q4 onwards should benefit from the commissioning of new lines at the new plants in Meru, Klang,” it said.

Moving forward, the groups said the natural rubber latex prices extended their downtrend in the 2nd quarter of 2014, averaging RM4.65 per kg wet compared to RM4.81 in the first quarter of 2014 and RM5.62 for the whole of 2013.

“This is reflective of the ample supply of rubber in the market as well as rising concerns on slower economic growth in China, the top consumer of rubber."

“We expect nitrile latex prices to remain relatively stable with some further upside bias in the short to medium term,” it said.

Global demand for gloves remains robust, particularly for nitrile gloves.

“In the highly developed countries, the demand continues to grow at a steady and moderate pace while stronger double digits growth can be seen from the emerging markets as hygiene and healthcare awareness continue to rise as the Middle East and also Africa, not to mention Asia with China and India leading the way."

The recent and on-going Ebola disease in Africa serves to emphasise the need for disposable gloves.

/theSTAR 26-08-2014

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