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10 Quick Takeaways From Riverstone Holdings Limited’s 2018 Second-Quarter Results

Credit: Rvierstone Holdings Limited

Last week, Riverstone Holdings Limited (SGX: AP4) announced its 2018 second-quarter (Q2 FY18) earnings update. As a quick introduction, Riverstone is a Malaysia-based company operating in two key areas of the rubber gloves industry: cleanroom gloves and medical gloves.

Here, we will look at 10 things that investors should know from its latest earnings update:

1. Revenue for the reporting quarter improved 0.5% year-on-year to RM 214.2 million.

2. Gross profit for the quarter rose 10.6% year-on-year to RM48.3 million.

3. Gross profit margin was 22.5%, up from 20.5% in the same period last year, mainly due to lower raw material costs.

4. Net profit for the reporting quarter jumped 23.9% year-on-year to RM 33.6 million.

5. Similarly, earnings per share for the quarter was up by 24.1% to 4.53 sen.

6. During the quarter, Riverstone generated operating cash flow of RM 26.3 million, down from RM 37.6 million a year ago.

7. As of 30 June 2018, Riverstone’s borrowings stood at RM 22.0 million while its cash and bank balances stood at RM 92.5 million, giving it a net cash position of RM 70.5 million.

8. The phase 5 expansion is now underway with an additional 1.4 billion pieces to ramp up total annual production capacity to 9.0 billion pieces by the end of this year.

9. The company declared an interim dividend of 1.5 sen per share for the quarter.

10. In its earnings release, Wong Teck Son, Riverstone’s executive chairman and CEO, commented on his company’s outlook:

We have completed the construction of our new plant for phase 5 of our capacity expansion plans. Accordingly, we will be gradually commissioning production lines over the remainder of FY2018 as we continue our growth trajectory. This will bring our total annual production capacity from 7.6 billion gloves to 9.0 billion gloves by end FY2018.

While increasing total production capacity, we are also intensifying sales and marketing efforts to increase order allocation from new and existing customers. Concurrently, our customised solutions which make our gloves viable in new contexts and markets continue to gain traction with customers. As a mark of confidence in the Group’s future operations and to reward shareholders, the Board of Directors is pleased to declare an interim dividend of 1.30 sen (RM).”

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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. Motley Fool has a recommendation for Riverstone Holdings Limited.