Careplus returns to black on rise in rubber glove demand amid COVID-19
24 Jul 2020
Careplus Group Bhd has returned to the black, posting a net profit of RM36.21 million in the second quarter (Q2) ended June 30, 2020 compared with a net loss of RM1.96 million recorded in the same period a year ago.
Group revenue rose to RM118.89 million from RM86.89 million previously, on the back of higher selling price and better capacity output.
The company, which is involved in the manufacturing, processing, and trading of gloves, saw its basic earnings per share jump to 6.70 sen from a loss per share 0.37 sen previously.
“The global pandemic caused by the COVID-19 virus has created an exponential increase in demand for medical gloves which have benefitted many manufacturers including Careplus.
“We saw our average selling prices (ASP) surge during the pandemic period and is expected to continue until vaccines have been developed and administered globally,” the company said in a filing to Bursa Malaysia.
The group therefore expects strong positive results during this pandemic period and beyond.
The overall business prospects continue to remain good. Sales by its subsidiary, Careglove Global Sdn Bhd, outside of Brazil have increased significantly while the Brazilian sales have also turned around significantly with better margins.
While spot ASP remain high, the ASP for regular buyers are expected to increase in the coming quarter barring any significant change to the current shortage of supply.
“The COVID-19 pandemic has accelerated our plan to increase the production capacity for the group’s subsidiaries. By end of this year, ten new production lines will be installed and commissioned. Another 13 new production lines will be installed and commissioned in 2021,” it said.
This will nearly double the total production capacity from 4.1 billion pieces to about 8.8 billion pieces by end-2021.
The group will have a total of 50 production lines by the end of 2021.
At the close today, shares of Careplus rose 0.41 per cent or 10 sen to RM2.46.