Kossan Rubber Industries (KLSE) Q2 2024 earnings summary

Executive summary

• Revenue for 1H24 rose 12.7% year-over-year to RM881.53 million, with profit before tax at RM79.55 million versus a loss of RM16.54 million in 1H23.

• 2Q24 revenue increased 10.9% year-over-year to RM429.91 million, with profit before tax at RM38.57 million, up from RM2.53 million in 2Q23.

• All divisions reported higher revenue and profitability, with the Gloves division leading growth due to improved sales volume and production efficiencies.

Financial highlights

• Net profit after tax for 1H24 was RM64.19 million, compared to a loss of RM26.23 million in 1H23.

• Basic earnings per share for 1H24 stood at 2.46 sen, up from a loss per share of 1.08 sen in 1H23.

• Cash and bank balances increased to RM1.29 billion as of 30 June 2024, up from RM1.24 billion a year earlier.

• Net assets per share rose to 150.98 sen as of 30 June 2024 from 150.34 sen at end-2023.

Outlook and guidance

• Glove industry faces ongoing supply-demand imbalance and pricing pressure from international competitors, with rising raw material and energy costs.

• Global logistics disruptions, especially due to the Red Sea Crisis, continue to impact shipments.

• Long-term glove demand outlook remains positive, supported by industry consolidation and increased hygiene awareness.

• Technical Rubber Products division expects project delays in infrastructure but anticipates satisfactory performance due to automotive sector strength.

• Group remains cautiously optimistic for FY2024, focusing on cost efficiency, automation, and sustainability initiatives.