Kossan’s Q1 2025 Report: Navigating a Dynamic Market with Resilient Growth
Kossan Rubber Industries Bhd, a prominent name in the Malaysian rubber products sector, has just unveiled its financial results for the first quarter ended 31 March 2025. This report offers a fresh look into the company’s performance amidst a dynamic global landscape. While the market continues to present its share of challenges, Kossan has demonstrated resilience, reporting a notable increase in both revenue and profit before tax compared to the same period last year. Let’s dive into the details of what drove these figures and what lies ahead for this industry stalwart.
First Quarter 2025: A Resilient Performance
Kossan Rubber Industries Bhd has reported a commendable performance for the first quarter ended 31 March 2025. The Group’s revenue saw a healthy increase, alongside significant improvements in profitability compared to the same period last year. This demonstrates the company’s ability to navigate a challenging global market.
Overall Financial Highlights (1Q25 vs. 1Q24)
1Q 2025
Revenue: RM 487.36 million
Profit Before Tax (PBT): RM 47.24 million
Profit After Tax (PAT): RM 36.03 million
Earnings Per Share (EPS): 1.40 sen
1Q 2024
Revenue: RM 451.63 million
Profit Before Tax (PBT): RM 40.98 million
Profit After Tax (PAT): RM 32.05 million
Earnings Per Share (EPS): 1.23 sen
Revenue for 1Q 2025 climbed to RM 487.36 million, marking a 7.91% increase from RM 451.63 million in 1Q 2024. This growth translated into a substantial rise in profitability, with Profit Before Tax (PBT) soaring by 15.26% to RM 47.24 million. Similarly, Profit After Tax (PAT) increased by 12.42% to RM 36.03 million, pushing Basic Earnings Per Share (EPS) up to 1.40 sen from 1.23 sen.
Segmental Performance Breakdown
A closer look at the divisions reveals varied contributions to the overall performance:
| Division | 1Q 2025 Revenue (RM ‘000) | 1Q 2024 Revenue (RM ‘000) | Revenue Change (%) | 1Q 2025 PBT (RM ‘000) | 1Q 2024 PBT (RM ‘000) | PBT Change (%) | Key Driver/Reason |
|---|---|---|---|---|---|---|---|
| Gloves | 415,681 | 379,633 | +9.50% | 36,336 | 26,565 | +36.78% | Increased sales volume and Average Selling Prices (ASP) |
| Technical Rubber Products (TRP) | 45,722 | 48,945 | -6.59% | 4,890 | 8,918 | -45.17% | Higher operational costs |
| Clean-Room | 25,953 | 23,047 | +12.61% | 4,444 | 2,423 | +83.41% | Higher revenue recorded |
The Gloves division was the primary growth engine, with revenue increasing by 9.50% and PBT surging by 36.78%. This impressive growth was largely driven by higher sales volume and improved Average Selling Prices (ASP). Conversely, the Technical Rubber Products (TRP) division saw a slight decline in revenue and a more significant drop in PBT, primarily due to higher operational costs. The Clean-Room division, however, delivered robust growth in both revenue and PBT, reflecting strong demand in its niche market.
Quarter-on-Quarter Snapshot (1Q25 vs. 4Q24)
Comparing the current quarter with the immediate preceding quarter (4Q 2024) offers further insights into the company’s momentum:
1Q 2025
Revenue: RM 487.36 million
Profit Before Tax (PBT): RM 47.24 million
4Q 2024
Revenue: RM 517.90 million
Profit Before Tax (PBT): RM 38.75 million
While overall revenue saw a slight dip of 5.90% from RM 517.90 million in 4Q 2024 to RM 487.36 million in 1Q 2025, Kossan managed to significantly improve its profitability. PBT jumped by 21.92% from RM 38.75 million in 4Q 2024 to RM 47.24 million in 1Q 2025. This positive shift in profit despite lower revenue indicates enhanced operational efficiency and better cost management.
The Gloves division’s revenue decreased by 7.53% compared to the preceding quarter, attributed to lower sales volume following earlier front-loading activities. However, its PBT remarkably increased by 42.35%, driven by lower raw material costs, higher ASP, and reduced production costs. The TRP division saw a revenue increase of 10.47% due to higher deliveries, but its PBT declined by 19.77% due to the delivery of lower-margin products. The Clean-Room division experienced a slight revenue decrease of 3.63% but improved its PBT by 3.78% due to better margins.
Navigating the Future: Risks and Prospects
Kossan’s management has provided a comprehensive outlook, acknowledging both the opportunities and challenges that lie ahead. The global glove market, while showing signs of cautious improvement with steady restocking and a gradual structural recovery, is expected to face mixed demand in the short term, particularly in the U.S.
Key Market Dynamics and Challenges:
- U.S. Tariff Uncertainty: The temporary reduction of U.S. tariffs on Chinese-made medical gloves (from 145% to 80% for 90 days, effective May 12, 2025) introduces significant uncertainty and is expected to lead to slight declines in Average Selling Prices (ASP) due to lower raw material costs and heightened competition.
- Intensified Competition: Chinese glove manufacturers are actively offloading inventory into non-U.S. markets, further contributing to market shifts and competitive pressures.
- TRP Division Headwinds: The Technical Rubber Products (TRP) division anticipates a moderation in infrastructure projects and subdued demand from the automotive sector, partly due to U.S. tariffs.
Strategic Positioning and Long-Term Outlook:
Despite these headwinds, Kossan remains confident in its strategic positioning. The company believes that structural shifts in global supply chains, coupled with an increasing emphasis on quality, regulatory compliance, and sustainability, will continue to favor Malaysian manufacturers in the medium to long term. Kossan’s strong reputation, diverse product range, and established customer relationships in regulated markets are expected to help maintain and expand market share, especially as U.S. inventories stabilize in the second half of 2025 and long-term consumption trends rise in emerging markets.
The Group’s strategy focuses on driving operational efficiency through automation, digitization, and workforce upskilling to mitigate cost inflation and ensure margin resilience. Sustainability is also a core pillar of its growth strategy, as outlined in its Sustainability Blueprint 2035, with clear commitments to low-carbon operations, responsible sourcing, and social compliance. With a robust balance sheet and an agile production model, Kossan aims to deliver sustainable growth and long-term value in a dynamic global landscape.
For the TRP division, despite the anticipated moderation, ongoing projects are expected to support a satisfactory performance for FY2025. The Clean-Room division is also projected to achieve stable and satisfactory results for the fiscal year. Overall, Kossan is cautiously optimistic about its performance for FY2025, barring any unforeseen circumstances.
Summary and
Kossan Rubber Industries Bhd
