Top Glove sees return to near pre-pandemic performance by 2027 [WATCH]

KUALA LUMPUR: Top Glove Corp Bhd, whose first-quarter net profit jumped sevenfold, expects to return to near pre-pandemic performance levels by 2027, driven by higher factory utilisation and improving margins.

The world's largest glove maker said its earnings before interest, tax, depreciation and amortisation for the quarter ended Nov 30, 2025, already matches 2019 levels, reflecting a recovery in operational efficiency.

Managing director Lim Cheong Guan said the reopening of additional factories has allowed the group to utilise previously idle production lines, reducing depreciation charges from unused assets and supporting stronger margins.

"As we open more factories, we are able to utilise more production lines that were previously idle. This removes sunk depreciation costs from unused lines and helps improve our profit before tax margin," he said during Top Glove's virtual results briefing.

"If this trend continues, we expect to be much closer to pre-pandemic performance levels by 2027," he added.

During the Covid-19 pandemic, Top Glove's earnings surged sharply, rising 412.7 per cent to RM1.87 billion in 2020 and a further 349.2 per cent to RM7.87 billion in 2021, as global demand for rubber gloves soared.

However, earnings declined post-pandemic, with net profit falling to RM235.97 million in 2022 before the group swung to net losses of RM926.64 million in 2023 and RM61.81 million in 2024. The company returned to profitability in 2025.

For the first quarter of the financial year ending Aug 31, 2026, Top Glove's net profit jumped 605.3 per cent to RM38.58 million from RM5.47 million a year earlier, underpinned by a significant improvement in operating performance.

Quarterly revenue edged down slightly to RM883.57 million from RM885.89 million previously, reflecting lower average selling prices amid declining raw material costs and a stronger ringgit against the US dollar.

Operating profit, however, surged nearly ninefold to RM41 million from RM4 million in the corresponding quarter last year.

Top Glove said the performance was supported by a 17 per cent increase in sales volume across key markets, led by robust demand from the United States.

Higher order volumes lifted plant utilisation rates, improving cost efficiency and economies of scale. Ongoing quality enhancements, cost optimisation initiatives and organisational realignment also contributed to lower costs and improved overall efficiency.

Looking ahead to the 2026 financial year, Cheong Guan said the group expects glove demand to continue growing, with longer lead times and significantly higher sales to Europe in the second quarter.

He said higher utilisation rates would further improve cost efficiency, while the reopening of four additional factories will add annual capacity of six billion pieces.

Cheong Guan added that stronger demand and extended lead times provide scope for gradual increases in average selling prices.

He also noted that a consistent hedging policy helps mitigate the impact of US dollar fluctuations, supporting the stability of the group's financial performance.

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