Financials

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED 30 SEPTEMBER 2024

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Condensed interim consolidated statement of profit or loss and other comprehensive income

Condensed interim statements of financial position

Review Of Performance

Income Statement Review

For 3Q2024, the Group achieved RM298.4 million in total revenue, a 33.9% increase as compared to RM222.8 million in 3Q2023. Cost of sales increased to RM194.8 million in 3Q2024, a 34.3% increase. The Group's gross profit up 33.2% from RM77.8 million in 3Q2023 to RM103.6 million in 3Q2024. Group's gross profit dropped marginally from 34.9% to 34.7% due to higher cost of sales.

The Group's other income reduced by 10.2% to RM7.0 million in 3Q2024. These are mainly due to interest income from lower balance of fixed deposits.

Selling and distribution expenses increased by 19.8% in 3Q2024 mainly due to increasing sales activities.

General and administrative expenses increased by 13.9% to RM9.3 million in 3Q2024 mainly due to increase in staff costs.

In 3Q2024, other operating expenses increased to RM6.6 million mainly due to net foreign exchange loss.

The Group’s effective tax rate was lower at 20.9% in 9M2024 compared to 21.5% in 9M2023 due to higher reinvestment allowances recognised in 9M2024. In 3Q2024, income tax expense increased to RM18.2 million as a result of higher taxable income.

Overall in 3Q2024, the Group's profit before taxation and profit after taxation increased by 23.0% to RM90.4 million and 21.8%. to RM72.2 million respectively.

Balance Sheet Review

As at 30 September 2024, non-current assets which consist of property, plant and equipment (PPE) and deferred tax assets, increased to RM728.2 million from RM727.1 million. PPE increased to RM727.0 million from RM726.0 million mainly on additions amounting to RM49.7 million coupled with foreign exchange adjustment offset by the depreciation charge of RM47.8 million and PPE written off or disposed. Deferred tax assets (DTA) has increased to RM1.2 million.

As of 30 September 2024, inventories rose to RM106.7 million from RM83.2 million compared to 31 December 2023, primarily due to increase in production volume. Similarly, trade receivables increased from RM128.0 million to RM155.8 million mainly due to normalisation of credit terms.

Cash and cash equivalents reduced to RM790.1 million as at 30 September 2024 from RM875.4 million as at 31 December 2023. For the 3Q2024, the Group generated RM100.1 million of net cash flows from operating activities and net cash flows used in investing activities amounting to RM37.8 million were mainly for the purchase of PPE. The Group has net cash flows used in financing activities in 3Q2024 which is mainly for payment of principal portion of lease liabilities.

Current liabilities increased to RM124.1 million as at 30 September 2024 mainly due to higher payables and accruals and provision for taxation. Payables and accruals increased to RM101.9 million as at 30 September 2024 from RM71.5 million as at 31 December 2023 whereas provision for taxation increased from RM11.9 million as at 31 December 2023 to RM21.7 million as at 30 September 2024.

Non-current liabilities increased to RM59.6 million as at 30 September 2024 from RM59.0 million mainly due to higher deferred tax liabilities.

Commentary On Current Year Prospects

In the current year, the supply of gloves has normalised. However, the business is facing challenges of price competition, currency fluctuations, volatile raw material prices, and increased production costs.