Q3 earnings surge on higher sales

PETALING JAYA: Glove manufacturer Hartalega Holdings Bhd’s net profit surged 70.7% to RM113.02 million in the third quarter ended Dec 31, 2017, from RM66.2 million in the previous corresponding quarter on the back of higher sales volume.

Revenue for the quarter up 32.2% to RM603.1 million, compared with RM456.3 million in the same period a year ago.

The group told the stock exchange that the increased revenue was also in line with higher sales demand and improvement in production capacity, as well as lower costs incurred from improvement in operational efficiencies.

Hartalega has proposed to declare a second interim dividend of 4 sen per share for the quarter under review.

For the nine months period, its earnings jumped 66.7% to RM322.7 million, against RM193.6 million in the same period a year ago, while revenue increased 38.1% to RM1.79 billion, from RM1.3 billion previously.

Hartalega said prospects for the rubber glove manufacturing sector remain strong with increasing demand arising from switching trends towards nitrile glove.

Moving into 2018, the group said it expects the demand for gloves will remain robust as Chinese vinyl glove producers still face difficulties conforming to strict environmental laws under China’s antipollution drive.

The group noted that Hartalega NGC is on schedule to meet this rising demand with progressive commissioning of Plant 4 and the commencement of construction of Plant 5.

“We have commissioned 10 production lines out of a total of 12 production lines in Plant 4. The increasing contribution of NGC to group sales revenues would help to consolidate margins and contribute further to group earnings,” it added.

Additionally, the group said it aims to launch its antimicrobial gloves in Europe by second quarter of 2018 and is working on securing Federal Drug Administration (FDA) approval to enter the US market.

The stock fell 52 sen or 4.58% to RM10.84 yesterday with 2.64 million shares traded.