Top Glove Corp, the world’s largest medical glove maker, posted a 98.6% drop in quarterly profit due to weaker demand for its products and higher production costs.
The Malaysian firm, which saw profits and demand surge during the COVID-19 pandemic, has also deferred and reduced its capital expenditure for the near term due to moderating demand.
Profit after tax for the third quarter ended May 31 plunged to 29.3 million ringgit ($6.67 million) from 2.06 billion ringgit in the same period last year.
Revenue for the quarter dropped to 1.46 billion ringgit from 4.16 billion ringgit.
Top Glove said production costs had increased due to global inflation, higher crude oil prices, natural gas and electricity tariffs, and an increase in the minimum wage in Malaysia.
“The escalating costs resulted in margin compression, as the group was unable to fully pass the cost through amidst the ongoing oversupply situation,” Top Glove said in a statement.
Shares of the company have dropped 53% so far this year.