Hartalega Q3 profit up 6%
Spike in revenue mitigates glove maker’s rising cost
PETALING JAYA: Hartalega Holdings Bhd, the world’s largest nitrile glove manufacturer, has posted improved earnings in the third quarter, as a surge in revenue mitigated the impact of rising cost.
Net profit in the three-month period ended Dec 31 rose 6% to RM119.76mil compared with RM113.02mil in the same quarter a year earlier. Revenue soared by almost a fifth to RM723.4mil on higher selling prices and increased volume.
The group has declared a second interim dividend of 2.2 sen per share, to be paid out on March 28.
“We expect the challenging business environment to persist, given heightening competition and cost increases such as the minimum wage hike, the higher natural gas tariff and additional costs associated with social compliance,” managing director Kuan Mun Leong said in a statement.
Kuan said the first four plants at the group’s next-generation integrated glove manufacturing complex were now fully operational. At its fifth plant, six out of the planned 12 manufacturing lines are already operational.
Meanwhile, the construction of Plant 6 is on track and the construction of Plant 7 is scheduled to commence in May 2019.
Plant 5 and Plant 6 will each have an annual installed capacity of 4.7 billion pieces. Plant 7, with an installed capacity of 2.6 billion gloves annually, is designed to focus on specialty products.
“The group’s efficiency will continue to improve as we embark on building new plants, which we believe will better position us against the competitive landscape,” Kuan said.
“At the same time, our expansion plan is cognisant of maintaining a healthy balance in supply and demand,” he added.
Currently, the group has an available production capacity of over 30 billion gloves annually.
Kuan said following the launch of the company’s latest innovation, the world’s first antimicrobial glove, it had received orders from clientele in 10 countries to date.
“We expect to continue gaining momentum and see strengthening market share as market acceptance increases,” he said.
Shares in Hartalega finished lower by four sen to RM5.45 at yesterday’s close.