Riverstone reports 2.8% decline in 1Q earnings to $6.5 mil on lower margins

SINGAPORE (May 13): Riverstone Holdings, the manufacturer of specialised cleanroom and healthcare gloves, saw its earnings fall 2.8% to RM30.2 million for the 1Q19 ended March, from RM31.1 million a year ago, on the back of lower gross profit margin.

Earnings per share (EPS) slipped to 4.08 sen for 1Q19, compared to 4.19 sen in 1Q18.

1Q19 revenue rose 14.6% to RM240.5 million, from RM209.8 million a year ago.

However, gross profit dipped 0.5% to RM46.6 million in 1Q19, from RM46.9 million a year ago, as gross profit margin contracted 2.9 percentage points to 19.4%.

This contraction was mainly attributable to a change in product mix and decrease in average selling prices of healthcare gloves.

Apart from heightened competition in the market, the downward price revision reflects the falling prices of Butadiene, a key raw material used in the production of the group’s nitrile-based gloves.

As at end March, cash and cash equivalents stood at RM128.1 million.

Looking ahead, Riverstone says macroeconomic headwinds such as US dollar fluctuations, volatile raw material prices, increase in overall production costs, as well as competition from other glove manufacturers continue to remain a challenge for the group.

It adds that it plans to increase its production capacity by another 1.4 billion pieces of gloves by the end of 2019, bringing its total annual production capacity to 10.4 billion.

Shares in Riverstone closed 0.5% higher at 99.5 cents on Monday.