KUALA LUMPUR (June 5): Glovemaker Careplus Group Bhd, whose share price has climbed by 918% this year, saw its first quarter net profit more than triple to RM1.14 million, from RM363,000 a year earlier, on higher revenue and lower tax incurred.
Earnings per share in the quarter ended March 31, 2020 rose to 0.21 sen, from 0.07 sen previously, Careplus’ exchange filing showed.
The group has approved a special dividend of 0.5 sen, which goes ex on July 9 and will be paid on July 23.
Careplus said pre-tax profit grew by 51.7% to RM1.21 million, from RM795,000 in the year-ago first quarter, on improved operational efficiency and the higher sales recorded.
Revenue rose 22.96% to RM104.7 million from RM85.15 million, on the back of higher output and higher sales.
On a quarter-on-quarter basis, however, revenue declined 3.71% amid a 3% decrease in sales volume.
On prospects, Careplus said it expects a strong positive result in coming quarters — a reversal from its trend of being loss making over the past three financial years.
Its expansion programme has been accelerated, where nine production lines will be commissioned by end-2020, and another two to be commissioned by end-2021.
“This will increase production capacity from 4.1 billion pieces to 6.5 billion pieces by end of 2021, barring any interruption.
This is as it expects better performance from after a turnaround in its Brazil venture under Careglove Global Sdn Bhd, as well as the push into higher margin surgical gloves via a joint venture with Ansell Services (Asia) Sdn Bhd.
"Careglove made a profit before tax of RM980,000 in Q1 of FY 2020,” it said. “Careglove sales outside of Brazil has increased significantly, while the Brazilian business has also turned around significantly with better margins.”
“Surgical gloves will be our new product line. Notwithstanding expected higher costs, we anticipate better average prices and profit margins,” it added.
The group said the coming months will see a balancing of the supply demand equation.
“But what is certain is with a much more health consciousness public and healthcare communities, as well as fear of new pandemics, the usage of personal protective equipment including gloves will increase,” it said.
Shares of Careplus closed nine sen or 5.84% higher at RM1.63 today, valuing the group at RM866.12 million.
http://www.theedgemarkets.com/article/careplus-1q-profit-triples-higher-revenue-declares-05-sen-special-dividend
