Hartalega earnings up on higher sales
Net profit up 6% to RM120.2mil in Q2 on improved sales
PETALING JAYA: Hartalega Holdings Bhd posted a 6% increase in net profit to RM120.2mil for the second quarter ended Sept 30 compared with the same quarter last year.
This brings its net profit for first-half financial year 2019 (FY19) to RM245.09mil compared with a net profit of RM209.73mil in the first half of FY18.
The glove maker has also declared a first interim dividend of 2.2 sen per share single-tier in respect of FY19, payable on Dec 28. The entitlement date for this is Dec 7.
In a filing with Bursa Malaysia, the group said its second-quarter net profit grew in tandem with higher sales volume achieved, which was contributed by growing demand from customers and improved average selling price from the increase in nitrile cost.
Sales volume during the second quarter was up 10.6%.
Hartalega added that the first shipment of antimicrobial gloves (AMG) had been delivered to a major German medical supply company in September, following the launch in the UK last quarter.
It said the group had also received orders from customers in about 10 countries.
“Hartalega is working on securing Federal Drug Administration approval for US market where there is greater awareness among healthcare professionals on the danger of healthcare-associated infections.
“Sales of the AMG is expected to gain momentum as it will be priced competitively to ensure quick market acceptance,” it said.
Notwithstanding potential challenges arising from the rising cost and heightening competition, Hartalega remains optimistic on its prospects, moving forward.
This will be underpinned by the ongoing expansion of its Next-Generation Integrated Glove Manufacturing Complex (NGC) and the potential growth of the AMG market share.
In meeting the rising global demand for rubber gloves, Hartalega has begun commis- sioning Plant 5 in August, to be followed by the construction of Plant 6.
Plant 5 and Plant 6 will each have annual installed capacity of 4.7 billion pieces.
A new plant – Plant 7 – is also in the expansion pipeline, tailoring to small orders focusing on specialty products. Plant 7 will have an annual installed capacity of 2.6 billion pieces.
The increasing contribution from the NGC to revenue will help improve further Hartalega’s earnings.
At the close, shares in the firm were traded at RM6.31 apiece.
High certification: A Hartalega factory in Batang Berjuntai. The group is working on securing Federal Drug Administration approval for the US market.