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10 Quick Things That Investors Should Know About Riverstone Holdings Limited Latest Result

Yesterday, Riverstone Holdings Limited (SGX: AP4) announced its 2018 third-quarter earnings update. As a quick introduction, Riverstone is a Malaysian-based company operating in two key areas of the rubber gloves industry: cleanroom gloves and healthcare gloves.

Without further ado, let’s will look at 10 things that investors should know from Riverstone’s latest earnings update.

  1. Revenue increased by 27.5% year-on-year to RM239.5 million.
  2. Yet, gross profit for the quarter was down 9.2% year-on-year to RM46.1 million.
  3. Riverstone’s gross profit margin for the latest quarter was 19.3%, down from 27.1% in the same period last year.
  4. Net profit for the reporting quarter declined by 6.5% year-on-year to RM32.1 million.
  5. Similarly, earnings per share for the quarter was down by 6.5% to 4.33 sen.
  6. In the quarter, Riverstone generated operating cash flow of RM44.7 million, down from RM58.8 million a year ago.
  7. As of 30 September 2018, Riverstone’s borrowings stood at RM20.5 million while its cash and bank balances stood at RM106.2 million, giving it a net cash position of RM85.7 million.
  8. The company’s Phase 5 expansion is in-progress, adding a new capacity of 1.4 billion gloves. By the end of 2018, Riverstone expects that its total annual production capacity will be 9.0 billion gloves.
  9. No dividend was declared for the quarter.
  10. In its earnings release, Mr Wong Teck Son, the executive chairman and CEO, commented on Riverstone’s outlook:

“Having transitioned seamlessly for our five phases of expansion over the years, we have in place the expertise and necessary preparations such as the manpower and infrastructure to support our growth. With phase 6 of our expansion plans poised to lift annual production capacity by a further 1.4 billion to a total of 10.4 billion pieces of gloves by end-FY2019, we are well positioned to tap on growing global demand for both our healthcare and cleanroom gloves.

While we continue to chart our upward growth trajectory, we are also committed to employing prudent cost controls and adopting automation to mitigate the impact of volatile raw material prices and foreign exchange fluctuations, both of which continue to remain a challenge for the Group.”

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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.