* Net profit plunged 92% from year ago, revenue down 67%
* Global demand easing, selling prices dropping
* China competition affected business, but won back
* Gradually resuming exports to the U.S., sales volumes to
* Customers watching Omicron development to decide on
KUALA LUMPUR, Dec 10 (Reuters) - Top Glove, the
world's largest medical glove maker, said its first-quarter
profit was nearly wiped out and it expected the business
environment in the near term to be challenging as competition
intensifies amid slowing demand for its products.
The results, released on Friday, sent the Malaysian
company's shares, already down 60% this year, tumbling another
With the wave of new COVID-19 Omicron variant spreading
globally, Top Glove said buyers were watching out for whether to
stockpile gloves again.
"We have not seen the full response of how it has developed
all over the world. A lot of our customers are basically on the
lookout, and I believe some of them could be also replenishing
their stock," he said, referring to huge orders from the Middle
East for medical use.
Top Glove was among the early beneficiaries of the pandemic
as demand for its protective rubber gloves surged with rising
infections, and its share price nearly quadrupled in 2020.
The company bet that the momentum would help it in a planned
$1.9 billion listing in Hong Kong, but it had to slash that
amount twice as its Kuala Lumpur-based stock then slumped as the
pandemic waned and the United States imposed a year-long ban on
the company's products over alleged forced labor https://www.reuters.com/world/asia-pacific/us-seizes-shipment-malaysias-top-glove-over-forced-labor-concerns-2021-05-13.
The ban was lifted in September https://www.reuters.com/business/malaysias-top-glove-says-cleared-resume-business-with-us-2021-09-10.
"The group saw a decrease in sales volume in the current
quarter, which was attributed to increased competition and
supply, owing to expansion by existing players and entrance of
new players," Top Glove said in a stock exchange filing on
Managing Director Lee Kim Meow said Top Glove's market share
was eroded by competition from China but the firm won back some
"During the previous months, some of our customers bought
gloves from China but with our good rapport with customers, our
good cost structure... we were able to be competitive and bring
them back," he said on a post-earnings conference call.
Sales volumes for Asia excluding Japan, fell 10% during the
period compared with the preceding quarter.
Top Glove's net profit for the September-November quarter
plunged 92% from a year earlier to 185.7 million ringgit ($44.04
Revenue tumbled 67% to 1.58 billion ringgit. Average selling
prices fell and customers were replenishing stocks cautiously as
they expected a further decline in glove prices, the company
Still, it said that it expected sales volumes to improve in
the coming quarters as it gradually resumes exports to the
(Reporting by Liz Lee in Kuala Lumpur; Additional reporting by
Sayantani Ghosh in Singapore ; Editing by Clarence Fernandez and