Hartalega’s Q1 earnings more than double to RM219.7m

PETALING JAYA: Hartalega Holdings Bhd’s net profit for its first quarter ended June 30, 2020 more than doubled to RM219.72 million from RM94.06 million a year ago, due mainly to higher sales revenue, lower raw material and energy costs coupled with the group’s initiatives to reduce operation costs.

Revenue jumped 43.7% to RM920.09 million from RM640.1 million in the corresponding quarter in the preceding year due to a 38.5% increase in sales volume and higher average selling prices.

The group’s earnings per share (EPS) for the quarter under review stood at 6.49 sen while net assets per share was 80 sen as at June 30.

Hartalega has proposed a final single tier dividend of 2.1 sen per share for FY20 ended March 31, to be paid on Oct 16.

CEO Kuan Mun Leong said market demand was exceptionally strong during the quarter due to the Covid-19 pandemic, and that due to the global shortage of gloves, average selling prices are expected to see upward revisions in the coming quarters, in line with prevailing market prices.

“Furthermore, moving forward the glove manufacturing sector is expected to undergo a structural step-up in demand, on the back of increased glove usage from emerging markets with low glove consumption per capita as well as heightened hygiene awareness. As a result, overall projected demand growth is expected to outstrip supply for the next two to three years,” he said.

With that, he added, Hartalega will continue to ramp up its capacity expansion plans through its Next Generation Integrated Glove Manufacturing Complex (NGC).

“For Plant 6 of the NGC, eight out of 12 production lines have been commissioned, while for Plant 7, the first production line is ontrack for completion by October 2020. All remaining examination glove production lines for Plant 7 are targeted to be completed by March 2021.

““Meanwhile for our next expansion phase of NGC 2.0, we aim to commission the first production line in the first half of 2022. The NGC 2.0 facility will provide an annual installed capacity of 32 billion pieces once completed,” he added.

In addition, to ensure the group continues to deliver gloves to frontliners globally without disruption, the group will continue to enforce the Covid-19 preventive measures that were put in place in order to minimise the risk of infection within its operations in Malaysia.