Riverstone Holdings Limited: Strong Net Profit Growth of 41.9% – Q3 2024 Financial Report Analysis

Business Description

Riverstone Holdings Limited is a Singapore-based company primarily engaged in the manufacturing and distribution of examination gloves, cleanroom gloves, and finger cots. The company operates through its subsidiaries in Malaysia, Thailand, China, and Singapore. The core business segments include the production of gloves and non-glove consumables such as plastic bags, finger cots, static shielding bags, face masks, wipers, and packaging materials.

Industry Position and Competitors

Riverstone Holdings Limited holds a significant position within the glove manufacturing industry. The company faces competition from other major glove manufacturers globally. The industry is currently experiencing challenges such as price competition, currency fluctuations, volatile raw material prices, and increased production costs.

Revenue Streams and Customer Base

Revenue streams primarily come from the sale of gloves and non-glove consumables. The customer base includes distributors and end-users in various geographical regions, including Malaysia, Thailand, China, and others. The company maintains a robust supply chain with manufacturing facilities strategically located in key markets.

Financial Statements Analysis

Income Statement

• Revenue for Q3 2024: RM298.4 million, a 33.9% increase from Q3 2023 (RM222.8 million).
• Gross profit for Q3 2024: RM103.6 million, a 33.2% increase from Q3 2023 (RM77.8 million).
• Net profit for Q3 2024: RM72.2 million, a 21.8% increase from Q3 2023 (RM59.3 million).
• Profit before taxation for Q3 2024: RM90.4 million, a 23% increase from Q3 2023 (RM73.5 million).

Balance Sheet

• Non-current assets as of 30 September 2024: RM728.2 million, a slight increase from 31 December 2023 (RM727.1 million).
• Inventories increased to RM106.7 million from RM83.2 million as of 31 December 2023.
• Trade receivables increased to RM155.8 million from RM128.0 million as of 31 December 2023.
• Cash and cash equivalents reduced to RM790.1 million as of 30 September 2024 from RM875.4 million as of 31 December 2023.
• Total equity as of 30 September 2024: RM1,612.1 million, a decrease from RM1,681.6 million as of 31 December 2023.

Cash Flow Statement

• Net cash flows generated from operating activities for 9M 2024: RM240.0 million.
• Net cash flows used in investing activities for 9M 2024: RM49.6 million.
• Net cash flows used in financing activities for 9M 2024: RM244.9 million, primarily for dividends payment.

Dividend Information

• Interim dividend for Q3 2024: 4.00 sen (RM) per ordinary share, tax-exempt one-tier.

Key Findings

Strengths

• Strong revenue and net profit growth in Q3 2024.
• Significant increase in inventories and trade receivables, indicating robust production and sales activities.
• Consistent dividend payments reflecting shareholder value.

Risks

• Reduced cash and cash equivalents, potentially impacting liquidity.
• Increased operating expenses, including staff costs and foreign exchange losses.
• Challenges in the industry, such as price competition, currency fluctuations, and increased production costs.

Special Activities

No specific actions mentioned for improving profitability.

Investment Recommendations

For Current Stockholders

Hold the stock due to strong revenue and profit growth, consistent dividend payments, and a solid industry position.

For Potential Investors

Consider investing in Riverstone Holdings Limited due to its impressive financial performance in Q3 2024, robust revenue streams, and consistent dividend payouts, despite the industry challenges.

Report Date

The financial report is for the nine months ended 30 September 2024.

Disclaimer

This analysis is based on the financial report provided and reflects the analyst’s opinion. Investors are advised to perform their own research and consider their financial situation before making any investment decisions.