Supermax's 4Q earnings surge nearly 30 times to RM44m

KUALA LUMPUR: Supermax Corp Bhd reported a strong set of earnings in its fourth quarter ended Dec 31, 2009, with net profit surging nearly 30 times to RM44.11 million from only RM1.48 million a year ago as it benefit from higher margins for its rubber gloves and contributions from its associates.

It said on Friday, Feb 19 that revenue rose 7.4% to RM196.42 million from RM182.82 million a year ago. Earnings per share were 16.55 sen versus 0.56 sen. It proposed a tax exempt final dividend of 8% per share of 50 sen for FY09 and special tax exempt dividend of 9%.

Supermax said revenue benefited from strong global demand, increased output from refurbished lines and higher prices commanded for rubber gloves sold.

The group recorded a near 30 times increase in profit after tax from RM1.5 million to RM44.1 million. This is despite the fact that the group had to incur a one-time exceptional interest expense of RM5.4 million arising from having to immediately expense off the balance of the serial bond upfront fee following the full redemption of the bond in November 2009," it said.

Supermax said the management had resolved to focus on certain key areas including receivables management, inventory management, productivity management and financial management at the beginning of 2009 and the concerted efforts put in have yielded strong results.

"In addition, the group has also been focusing on producing high margin products resulting in higher manufacturing profits in the current quarter," it added.

Aside from higher manufacturing income, the group also benefited from improvements in its distribution income, as reflected in higher profit contributions from its associate companies. It also benefited from the favourable foreign exchange translation as the currencies of the countries in which the associate companies operated had all appreciated against the US dollar.

Its operational expenses in 4Q were lower at RM150.72 million versus RM163 million a year ago. Its associate companies contributed RM13.36 million compared with losses of RM10.32 million a year ago.

For FY09, net profit rose 176% to RM129.75 million from RM46.99 million while revenue was slightly higher at RM814.83 million versus RM811.82 million.