Hartalega slips into the red in Q4 on tax provision
Hartalega Holdings Bhd recorded a net loss of RM197.90 million in the fourth quarter ended March 31, 2022 compared with a net profit of RM1.12 billion in the same quarter last year primarily due to the provision of Prosperity Tax (Cukai Makmur).
Revenue in the same quarter decreased 58% to RM968.69 million from RM2.31 billion in the corresponding quarter in the previous year, attributed to normalising average selling prices (ASP) coupled with reduced sales volume, in addition to higher operating cost.
For the full year (FY22), its net profit increased 12.1% to RM3.23 billion from RM2.89 billion in FY21, mainly driven by higher revenue that grew 17% to RM7.89 billion from RM6.70 million in the year before mainly contributed by higher ASP in the first half of the current financial year.
Earnings per share for the full financial year increased to 94.64 sen. Net assets per share stood at RM1.50 as at March 31, 2022.
Hartalega declared a third interim single tier dividend of 3.5 sen per share for FY22 with the entitlement date on May, 26 2022 and payable on June 9, 2022. This brings total dividend for the financial year to 53.5 sen per share.
Hartalega CEO Kuan Mun Leong said the normalisation of ASP and demand impacted the Q4 bottom line.
“For the glove sector, current ASP seem to have bottomed out and the opening of international borders and easing of travel restrictions is expected to relieve the current shortage of workers, which will be of benefit to Hartalega,” he said in a statement.
In the longer term, the glove sector is expected to see a structural step-up in demand with increased glove usage from emerging markets that have low glove consumption base, complemented with higher awareness of hygiene and health consciousness among healthcare practitioners post-pandemic.
“We continue to face external pressures, including the ongoing Russia-Ukraine conflict and the lockdown in major cities in China resulting from the new wave of Covid
cases, which are expected to have repercussions on the already strained global supply chain, leading to rising global commodity and raw material prices. Additionally, the recent implementation of the new minimum wage policy in Malaysia is likely to result in higher operating costs for the manufacturing sector.
“Amid this challenging backdrop, we are focused on cost optimisation, continuous efficiency improvement and automation initiatives across our operations to ensure the sustainability and resilience of the group,” said Kuan.