STGT’s 2Q Profit Soars 5 Folds to Book over ฿1Bn as Sales Tremendously Boost Revenue

Sri Trang Gloves (Thailand) Public Company Limited (STGT) has reported its 2Q20 consolidated financial statement through the Stock Exchange of Thailand as follows;

 

The robust global demand for gloves, which is still continuing, drove STGT profit in 2Q20 to grow by 510% to 1,056 million baht.

Total revenue from sales in 2Q/20 was THB 4,856.8 million, growing 29.2% QoQ and 70.5% YoY. This can be attributed to: 1) An Increase in sales volume of 17.6% QoQ and 62.1% YoY to 7,380.6 million pieces in 2Q/20. The incremental volume came from the new capacity from STGT’s HatYai and Trangplants, which were fully commissioned in February 2020. Thanks to STGT’s one-of-a-kind switchable powder-free production lines, STGT was able to increase the NBR glove output to serve the surge in demand for NBR gloves, particularly from the developed markets.

In 2Q/20, STGT’s NRPF sales volume increased 6.7% QoQ while NBRs ales volume increased 16.6%QoQ;2) An increase in ASP 9.9% QoQ and 5.2% YoY to 658THB per 1,000 pcs ($20.71). The ASPs of both NR and NBR gloves increased approximately the same degree during 2Q/20.

 

Meanwhile, raw material prices continued to decline QoQ and YoY. The percentage of cost of sales to revenue decreased from 81.2% in Q1/20 to 70.8% in Q2/20. The decline in raw material prices, which dropped 0.7% QoQ and 9.1% YoY for NR latex, and 7.8% QoQ and 19.4% YoY for NBR latex, and the economy of scale derived from the additional production volume, drove a significant increase in gross profit margin from 18.8% in 1Q/20 to 29.2% in 2Q/20.

 

STGT stated that it will continue to deliver high quality hand protection to users worldwide at the maximum output. The utilization rate of 95% will be maintained and STGT has streamlined its products mix and production process to ensure that STGT will achieve the highest production volume to save lives during the pandemic. The company is committed to the expansion plan to achieve 70 billion pieces in annual installed production capacity 2 years earlier than the initial plan.The new capacity will start to come out from SR2by 1Q/21, followed by SR3 in 2Q/21.

By the end of 2022, the capacity will reach 45.8 billion pieces per annum, representing a 40.5% growth from 2020, with the potential product mix of 50% NRgloves and 50% NBR gloves. Further cost-saving initiatives to achieve an even higher profit and return to shareholders are in STGT’s focus. The highest standard of good governance to all stakeholders, particularly STGT’s workers and staff, known as “best in class workforce treatment,”will continue to be the pride and practice.