Higher sales, cheaper raw material, favourable forex drives Supermax profit

KUALA LUMPUR (Feb 26): Supermax Corp Bhd posted a  22% rise in fourth-quarter profit from a year earlier as higher sales, cheaper raw material, and favourable foreign exchange rates lifted the rubber glove manufacturer's bottom line.

In a statement to the exchange, Supemax said it achieved a net profit of RM32.09 million in the quarter ended December 31, 2012 (4QFY12) versus RM26.35 million a year earlier. Revenue grew 19% to RM322.26 million from RM271.2 million as the manufacturer expanded its production capacity.

"This was largely because of new capacity added from new and refurbished lines. With the economic woes in the Eurozone and US continuing and a slowdown in China demand seen, we expect rubber prices to remain soft in 2013." Supermax said.

Cumulative net profit rose 17% to RM121.77 million from RM104.16 million as revenue was up 3% to RM1.05 billion from RM1.02 billion.

According to Supermax, slower economic growth in advanced economies such as the US, and European countries had not dampened global rubber glove demand.

This is because demand for the product had also come from emerging markets across Asia, Africa and the Middle East as buyers normalised their buying patterns, according to the export-based company which conducts its sales in US dollars.

A weaker ringgit against the strengthening US dollar had also augured well for the company as its overseas-derived income translates into higher earnings upon conversion into the local currency.

Supermax has proposed a tax-free final dividend of three sen a share in 4QFY12, bringing its total payout to five sen a share during the year. This compares with 4.75 sen in FY11.

In a separate statement, executive chairman and group managing director Datuk Seri Stanley Thai said Supermax's FY12 performance was achieved amid a challenging operating backdrop.

“Amid operating under very challenging global economic circumstances, we have achieved earnings growth in excess of 16% this year," Thai said.

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