Hartalega profit surges 28%

PETALING JAYA: Malaysia’s largest listed glove maker, Hartalega Holdings Bhd, reported a 28% increase in net profit in its fourth quarter ended March 31, on the back of stronger sales and lower costs.

Hartalega’s net profit in the January-march 2020 period rose to Rm115.58mil compared to Rm90.33mil in the corresponding quarter last year.

The improvement in bottom line was mainly due to higher sales revenue, lower raw material and energy costs, coupled with the group’s cost control initiative to reduce operation costs.

Meanwhile, the group’s revenue for the final quarter of financial year 2020 (FY20) amounted to Rm777.9mil, representing an increase of Rm94.7mil or 13.9% year-on-year (y-o-y).

“The higher sales revenue was mainly due to an increase in sales volume of 18.3%,” stated Hartalega.

With the higher profitability in the fourth quarter, the earnings per share jumped to 3.43 sen, up from 2.72 sen.

The glove maker announced a dividend of 2.05 sen per share for the fourth quarter.

Cumulatively, for FY20 ended March 31, Hartalega recorded a 4.48% y-o-y reduction in earnings to Rm434.78mil compared to Rm455.18mil in the previous financial year.

However, the group achieved sales revenue of Rm2.92bil in FY20, which was an increase of Rm96.7mil or 3.4% y-o-y.

“The higher sales revenue reported was mainly due to an increase in sales volume of 8.8%. The average selling price reduced by 4% in tandem with lower raw material cost and competitive industry pricing,” said Hartalega.

Moving forward, the group said it remains optimistic of its longer term prospects, underpinned by growing demand for rubber gloves and ongoing expansion plans.

In line with growing rubber glove demand globally, particularly post-covid-19 pandemic, Hartalega said it will continue with its Next Generation Integrated Glove Manufacturing Complex (NGC) capacity expansion plans.

“Plant 6 of the NGC facility has commissioned four out of 12 lines with remaining production lines to come on progressively. Plant 6 will have an annual installed capacity of 4.7 billion pieces once completed.

“Plant 7 is also in the expansion pipeline catering to small orders focusing more on specialty products and will have an annual installed capacity of 2.4 billion pieces,” it said.

With the progressive commissioning of Plant 6 and 7, Hartalega’s annual installed capacity is expected to increase from 38.1 billion pieces currently to 43.7 billion piecesbyfy22.