KUALA LUMPUR: Yew Lee Pacific Group Bhd (YLP) net loss widened to RM1.38 million in the fourth quarter (Q4) ended December 31, 2023 (FY23), reflecting the impact of current market conditions and the strategic investments made by the company, including the costs associated with setting up a new subsidiary in Thailand.
Revenue for the quarter stood at RM4.93 million, slightly lower from RM5.32 million posted in the same quarter in FY22, attributed to variations in sales orders across markets.
In Q4, YLP’s manufacturing segment continued to perform strongly, contributing RM3.6 million to the quarter’s revenue, up from RM3.3 million in Q4 FY22.
This positive momentum shows the manufacturing arm’s resilience and consistent performance amidst the broader challenges within the glove industry.
The trading segment faced fluctuations, largely due to competition within the markets that they operate in and price wars.
In response, the company is taking decisive steps to streamline this segment, focusing on consolidation within the trading segment to enhance its cost efficiency.
These adjustments are part of a broader strategy to ensure the trading segment is alignment with the company’s efficiency and profitability goals.
YLP managing director Ang Lee Leong said as the company navigates through the current phase, it is important to recognise the impact of broader industry trends on its performance, particularly in the rubber glove sector, which remains a significant contributor to YLP’s revenue.
“The industry has faced challenges due to oversupply and market imbalances following rapid expansions and stockpiling during the pandemic.
“Despite these hurdles, we are optimistic about the sector’s recovery, driven by heightened global hygiene awareness and increasing glove usage,” he said in a statement.
Ang said to complement YLP’s core business and mitigate industry-specific risks, the company is actively diversifying its portfolio.
“We are expanding our industrial brush range, introducing customisable options to meet diverse market needs and solidifying our presence in local and international markets.
“Additionally, we’re broadening our scope in the industrial hardware and machinery parts segment, exploring new opportunities in semiconductors, timber, glass, and agriculture sectors.
“These strategic initiatives are designed to strengthen our market position and reduce our dependency on the rubber glove industry, ensuring a more balanced and resilient business model for YLP,” Ang said.
As of February 23, 2024, the share price of YLP stands at RM0.39, representing a market capitalisation of RM208 million.
