Home News Supermax Corp. Reports Fourth Consecutive Quarterly Loss

Supermax Corp. Reports Fourth Consecutive Quarterly Loss

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Supermax Corp., a leading glove maker in Malaysia, has announced its fourth consecutive quarterly loss. This news has caused a significant decline in the company’s shares.

Shares Experience a Sharp Decline

Shares of Supermax Corp. plummeted by as much as 8.7% following the announcement of the company’s loss. As of Thursday morning, the shares were down by 8.3%, reaching 0.95 ringgit. This decline has also impacted the company’s 12-month gains, which now stand at 5.6%.

Weaker Demand and Lower Prices Contribute to Loss

Supermax Corp. reported a net loss of MYR2.05 million ($440,642) for the fiscal first quarter ending on September 30. This is a significant decrease compared to the MYR5.71 million profit recorded during the same period last year. The company attributes these losses to weaker demand and persistently lower selling prices.

Glove Oversupply Creates Challenges

According to a filing released late Wednesday, Supermax Corp. anticipates ongoing challenges in its operating environment due to an oversupply of gloves. Analyst Raymond Choo Ping Khoon from Kenanga Investment Bank expressed similar concerns in a note. However, there are signs that the oversupply issue may improve over time as glove makers begin to reduce production capacity by decommissioning certain plants.

A Positive Outlook for the Future

Choo also mentioned that if there is no additional new capacity, an equilibrium in demand and supply for gloves may be achieved by 2025. This offers hope for Supermax Corp. and the industry as a whole. Additionally, Citi analysts Megat Fais and Chong Zhou stated in a note that smaller companies may exit the market by the end of 2024, as selling prices continue to remain low amid subdued market conditions.

As of now, Supermax Corp. is facing significant challenges, but there is optimism that these conditions may improve in the future.

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