Supermax sees Q1 profit surges over 30 times to RM790mil, mulls dual listing on SGX
KUALA LUMPUR: Supermax Corp Bhd has achieved another quarter of record profits amid higher average selling prices and continuous robust global demand for medical gloves.
During the first quarter (Q1) ended September 30, 2020, Supermax’s net profit surged to RM789.52 million from RM24.75 million recorded in the same quarter last year.
Its revenue increased 265.6 per cent to RM1.35 billion from RM369.94 million in the corresponding quarter a year ago.
Supermax said its already sound financial position had strengthened dramatically, most notably to a net cash position with cash and bank balances amounting to RM2.36 billion as of September 30 this year.
This is mainly due to high collections from increased sales where customers pay between 30 per cent to 50 per cent deposits in advance to secure supply.
“Our products are sold to over 165 countries and we currently export 58 per cent of production under our own brands via our own distribution centres and 40 per cent through independent distributors.
“The remaining two per cent is for OEM (original equipment manufacturer) production,” it said in a statement today.
Supermax said in terms of capacity expansion in Malaysia, the company had put in place expansion plans of building a total of five glove manufacturing plants between now and 2022.
This will yield additional production capacity of 22.25 billion making a total of 48.42 billion gloves by end-2022.
The group will invest total capital expenditure of RM1.39 billion for the new plants.
Supermax is also reinvesting the earnings derived from its distribution centres into the respective countries in particular in the US and the UK, in order to address the concerns over disruption of personal protective equipment (PPE) supply chain.
“We are now in the planning stages and will kick-start the US and UK projects in the first half of 2021 and target to commission in stages starting the first half of 2022,” it said.
It said the capex earmarked for the US was US$300 million for Phase 1 and US$250 million for Phase 2 for a total of US$550 million, and 50 million British pounds for the UK.
Besides that, the group has decided to enter into face mask manufacturing in Malaysia and Canada.
“This is to complement our existing global supply chain that the group has built over the years. We have started delivery of millions of masks to the government in Canada since early October 2020.
“In this quarter, we have witnessed expansion in both our manufacturing and distribution contributions.
“We are optimistic that our OBM (own brand manufacturing) cum distribution business model will exhibit even healthier performance as we are in an oversold position,” it said.
Meanwhile, Supermax said it was exploring the options of a dual listing on the Singapore Exchange (SGX).
In a separate filing to Bursa Malaysia, the group said the proposed SGX listing was still at an initial stage and the structure had not been finalised.
“The proposed SGX Listing, if undertaken, is expected to expand and diversify the shareholders base of Supermax and serve as a platform for Supermax to pursue growth opportunities by providing additional channels for Supermax to raised funds, if necessary,” it said.
Source: NST