Karex Incurs Its First Full-year Net Loss as a Result of Lockdown-related and Distribution Costs

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Karex Bhd declared its first full-year net loss in history, blaming it on unavoidable operational costs associated with the lockout and increasing distribution costs.

The world’s largest condom manufacturer reported a RM1.02 million net loss for the fiscal year ending June 30, 2021 (FY21), down from an RM228,000 profit in FY20.

Revenue, on the other hand, increased 6.26 percent to RM419.82 million from RM395.07 million, owing mostly to increased condom sales in the Americas and Asia.

Karex had a net loss of RM5.1 million in the fourth fiscal quarter (4QFY21), compared to a profit of RM1.43 million a year ago.

The business stated that the movement control order had a detrimental impact on its quarterly profitability, resulting in RM4.2 million in unavoidable operational charges.

The impact of these production costs was exacerbated further by the ongoing disruption of global transportation networks, which resulted in an additional RM6.5 million in distribution fees.

Quarterly revenue, on the other hand, increased 17.16 percent year on year to RM106.72 million in 4QFY21 from RM91.09 million a year ago, owing to increased sales contributions from the sexual wellness and medical categories.

Karex had a larger quarterly loss compared to the previous quarter’s RM3.17 million. Revenue, on the other hand, increased 11.63 percent to RM95.61 million, owing to many tender orders that were earlier postponed due to global logistic problems during the quarter.

On possibilities, Karex stated that the resumption of social connections that have been lacking in many countries for over a year is projected to fuel immediate demand for condoms and lubricants as vaccination rates increase globally.

“In order to capitalise on anticipated new market trends, the group is positioned to extend its product range in terms of capacity and variety in the near future to include products such as medical gloves,” it added.

Karex’s share price finished 0.5 sen or 1.11 percent lower at 44.5 sen, valuing the company at RM469 million.

Published by Zack Baharum

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