KUALA LUMPUR (May 24): Karex Bhd, the world’s largest condom manufacturer, saw its net loss widen to RM3.17 million in its third financial quarter ended March 31 (3QFY21) from RM1.13 million a year ago, due to disruptions to global logistics network which had affected the delivery of several orders.
The worsening Covid-19 situation in Malaysia had also resulted in a reduced output for the group’s Malaysian manufacturing facilities.
“These factors contributed to a lower revenue of RM95.61 million for the quarter, down 3.6% from RM99.15 million in 3QFY20,” it said in a filing with Bursa Malaysia today.
It reported a higher loss per share of 0.3 sen for 3QFY21 compared with 0.11 sen a year ago.
Karex said it continued to incur Covid-19 related expenses, coupled with additional unavoidable operational cost of RM3 million caused by the reduced output during the quarter. “These effects were further compounded by higher shipping and air freight charges of RM3.5 million putting pressure on the group’s profitability, resulting in a loss before tax of RM4.1 million for the quarter.”
It reported a net profit of RM2.79 million on revenue of RM115.75 million in 2QFY21.
It did not declare any dividends during the quarter.
For the cumulative nine months (9MFY21), it posted a net profit of RM4.08 million, versus a net loss of RM1.2 million a year ago, due to a more favourable sales mix.
Revenue improved 3% year-on-year to RM313.09 million in 9MFY21, primarily due to stronger condom sales to the commercial market in the Asia and Americas regions.
On its prospects, Karex said the ongoing pandemic has presented a unique challenge to the sexual health and medical devices industries, causing widespread disruptions to operations and supply chains.
Along with the emphasis on social compliance, this has caused consolidation in the industry and disruption to the supply of condoms globally, it added.
“In spite of this, condoms remain an essential tool for family planning as well as preventing the spread of HIV and other sexually transmitted infections. The group remains confident that we are uniquely poised to overcome the aforementioned operation hurdles in order to take advantage of potential opportunities presented by the renewed global emphasis on hygiene and disease prevention.
“Our manufacturing experience, cost competitiveness and breadth of offerings are compelling competitive advantages that will allow us to capture orders within the condom space that has been shifting from a government subsidised model to one that is more commercial in nature during recent times. In addition, our branded segment is also expected to expand into new regions during the year, enabling us to continue to capture a greater share of the value within the industry,” it said.
Shares in Karex closed 0.8% or half a sen higher at 63 sen today, valuing it at RM663.8 million. A total of 755,300 shares were done.
