By Chester Tay

KUALA LUMPUR, Malaysia--Top Glove Corp. Bhd. shares fell Wednesday after the Malaysian glove maker reported a nearly 97% drop in quarterly profit due to weaker prices, as global supply of protective wear rises.

Shares of the world's largest glove maker, which were down almost 4% prior to its earnings release, extended losses to more than 11% in the afternoon session, falling to their lowest level in more than two years.

The drop came after Top Glove said it is also contending with rising operating costs and intensifying competition, developments it said it expected as the pandemic recedes.

"Having been in the glove business for 31 years, we have seen many such cycles and our experience has prepared us well to go through this one," Managing Director Lee Kim Meow said in a statement.

Top Glove's share price nearly quadrupled in 2020 as the Covid-19 pandemic raised global demand for rubber medical gloves and other protective wear. Last year, as vaccines brought the virus under control in many parts of the world and new supply came into the market, shares fell 58%.

This week, the company said it would postpone a planned offering of shares in Hong Kong, citing market conditions.

Still, the latest earnings also show that sales to the U.S., a key market, are recovering after the lifting of a temporary ban on the company's exports in September. U.S. sales accounted for 13% of total exports sales in February, up from just 4% in September last year.

That raised the company's production utilization rate to 73% from 60% over the same period, Mr. Lee said.

Brokerage AmInvestment earlier today kept a hold rating on Top Glove while cutting its target price to MYR1.90 from MYR1.95, saying elevated oil prices are leading to higher raw material costs, though the company may not able to completely pass on the increase to customers due to stiff competition.

Shares were last down 11% at MYR1.67.


Write to Chester Tay at chester.tay@wsj.com


(END) Dow Jones Newswires

03-09-22 0335ET