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KUALA LUMPUR (Feb 11): Hartalega Holdings Bhd posted a marginal 1.27% increase in its latest quarterly net profit to RM121.27 million or 3.6 sen per share, from RM119.76 million or 3.6 sen per share a year earlier, thanks to higher sales volume.

Revenue for the third quarter ended Dec 31, 2019 rose 10.11% to RM796.55 million, from RM723.39 million previously, the glove maker said in a filing with Bursa Malaysia.

“Demand growth is expected to continue, particularly in the near-term, given the ongoing coronavirus outbreak in China," Hartalega managing director Kuan Mun Leong said in a separate statement.

"We are committed to playing our role effectively by ensuring timely delivery of glove shipments to China to aid efforts in controlling the outbreak. As part of our corporate social responsibility efforts, we have pledged to donate a total of 2.58 million pieces of gloves to this cause," Kuan said.

The group has declared an interim dividend of 1.8 sen per share, payable on March 27.

For the nine-month period ended Dec 31, 2019 (9MFY20), Hartalega’s net profit slipped 12.51% to RM319.21 million or 9.49 sen per share, from RM364.84 million or 10.97 sen per share in the previous corresponding period,  while revenue was flat at RM2.146 billion against RM2.144 billion previously.

The group said earnings for the cumulative nine months was lower due to lower average selling price and higher natural gas and R&D expenses, despite the higher sales volume.

Hartalega is optimistic of its longer term prospects, underpinned by growing demand for rubber gloves and ongoing next-generation integrated glove manufacturing complex (NGC) expansion.

“With the progressive commissioning of Plants 6 and 7, Hartalega’s annual installed capacity is expected to increase from the current 36.6 billion to 44.7 billion pieces by the financial year ended Dec 31, 2022,” Hartalega said.

It said Plant 6 will have an annual installed capacity of 4.7 billion pieces once completed, while Plant 7 will have an annual installed capacity of 3.4 billion pieces.

“Hartalega will also intensify investment into Industry 4.0 technologies to develop automation solutions, IoT technology and AI solutions, in order to reduce dependency on manual labour and enhance operation effectiveness,” the glove maker added.

Shares of Hartalega closed seven sen or 1.18% higher at RM6 today, valuing the group at RM20.28 billion. Some 9.26 million shares were traded.

https://www.theedgemarkets.com/article/hartalega-3q-net-profit-higher-sales-volume
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