Revenue declines 17.1% due to lower prices for gloves amid more intense competition
[SINGAPORE] Glovemaker Riverstone Holdings reported a drop of 28 per cent in net profit to RM52 million (S$16.3 million) for the third quarter ended Sep 30, from RM72.2 million in the corresponding year-ago period.
Revenue fell 17.1 per cent to RM247.5 million, from RM298.4 million. This was due to lower blended average selling prices for healthcare gloves amid intensified market competition, the group said in a bourse filling on Monday (Nov 10).
However, on a quarter-on-quarter basis, the group saw a 1.1 per cent increase in revenue due to stronger sales volume of clean-room consumables amid demand from data centre and artificial intelligence-related industries, as well as higher shipments of customised healthcare gloves.
The board has recommended an interim dividend of RM0.025 per share for the quarter, bringing its cumulative payout ratio to 77.1 per cent.
Gross profit for the latest quarter fell 26.1 per cent year on year to RM76.6 million, while gross profit margin declined marginally by 3.8 percentage points to 30.9 per cent. The group attributed this to unfavourable foreign exchange rates.
Other operating expenses fell to RM800,000 from RM6.6 million in the preceding year, largely attributable to gains on disposal of property, plant and equipment.
Wong Teek Son, executive chairman and chief executive officer of Riverstone, said the generic healthcare segment remains “highly competitive” and has led to continued margin pressure for these products.
“The group remains committed to pushing out its higher-value customised products, which are expected to differentiate us from the broader generic market and enhance long-term value creation,” Wong added.
Shares of Riverstone closed down 0.6 per cent or S$0.005 at S$0.865 on Monday, before the announcement.
