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What Investors Should Know About Top Glove’s Performance For 2017

The Malaysia-based Top Glove (SGX: BVA)(KLSE:7113.KL) is the largest gloves maker in the world with a market share of about 25%. The company, which has a primary listing on Malaysia’s stock market, Bursa Malaysia, was dual-listed here in Singapore in June 2016.The company recently published its annual report for its fiscal year ended 31 August 2017 (FY17). I have been reading the report to understand Top Glove’s business performance in FY17, and also its plans for the future.

In this article, I will focus on Top Glove’s business performance by highlighting some key metrics. [Editor’s note: An article on Top Glove’s future plans has been published. It can be found here.]

Revenue

Revenue was up by 18% in FY17 as compared to FY16, reaching RM 3.4 billion for the year. The higher revenue was due to higher average selling prices (ASPs) which were up by 6% as compared to FY16, and also an increase in sales volume, up by 7% as compared to the previous year.

EBITDA (earnings before interest, tax, depreciation and amortisation)

FY17 EBITDA declined by 7.3% as compared to last year to RM 484 million, mainly due to higher raw material prices and negative currency movements.

Profit attributable to shareholders

FY17 profit attributable to shareholders declined by 8.9% to RM 328.6 million, primarily due to higher raw material prices and negative currency movements.

Balance sheet strength

Balance sheet remained strong with net cash of RM70.6 million. This is, however, down from RM 303.7 million, mainly due to capital expenditure.

Return on equity

Return on equity in FY17 was down from 19.9% in FY16 to 16.3%, mainly due to the lower profitability.

Dividend per share

Dividend per share remained steady at 14.5 sen. This translates to a payout ratio of about 56% of net profit.

Market capitalisation

As at the end of the August 2017, Top Glove’s market capitalization was RM7.0 billion, up from RM 5.3 billion a year ago.

Conclusion

Overall, Top Glove delivered a mixed performance in FY17 with higher revenue but weaker profitability. It maintained its dividend payout and its share price grew by 32% during the year.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.