SINGAPORE (Feb 22): Riverstone Holdings, the manufacturer of specialised cleanroom and healthcare gloves, reported a 4.9% fall in FY16 earnings to RM120.4 million ($38.3 million) from a year ago due to higher raw material prices and less favourable foreign exchange fluctuations.
FY16 revenue rose 16.9% to RM654.9 million. But cost of sales increased to RM481.7 million in line with increase in total revenue. Gross profit also dropped by 1.0% to RM173.2 million due to the allocation of much of the new production capacity for lower-margin healthcare gloves as a response to the rapid growth in its demand which currently outpaces that of cleanroom gloves. Furthermore, the group witnessed a decline in the average selling price of healthcare gloves in 2016, as a result of intense competition. Correspondingly, gross profit margin contracted by 4.8 percentage points to 26.4% for FY2016.
CEO Wong Teek Son said, “Following the successful completion of the third phase of our expansion plan, we are on track for the subsequent phase which will similarly supplement one billion pieces of gloves to our production capacity, bringing it to a total of 7.2 billion pieces per annum by the end of 2017.”
The board is recommending a final dividend of 5.19 sen per share, which brings the full-year dividends to 6.49 sen.
Shares of Riverstone closed 0.5 cent lower at 90.5 cents.
