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Its CEO Kuan Mun Leong said: “Market demand was exceptionally strong during the quarter due to the unfortunate Covid-19 pandemic. With a new wave of cases emerging in the US, Latin America and India, along with upticks in other countries across the world, this surge in demand growth is expected to continue in the coming years."

KUALA LUMPUR: Hartalega Holdings Bhd's net profit jumped 132% to RM219.72mil in the first quarter ended June 30,2020from RM94.06mil a year ago, underpinned by higher sales revenue, on the back of increased sales volume and higher average selling price.

The glove maker announced to Bursa Malaysia on Tuesday its revenue increased by 43.7% to RM920.08mil from RM640.10mil. Earnings per share were 6.49 sen compared with 2.81 sen.

It declared an interim dividend of 2.1 sen a share compared with 1.9 sen.

Hartalega said the strong financial performance was was further supported by lower raw material and energy costs, as well as the group’s continuous cost optimisation initiatives.

Its CEO Kuan Mun Leong said: “Market demand was exceptionally strong during the quarter due to the unfortunate Covid-19 pandemic. With a new wave of cases emerging in the US, Latin America and India, along with upticks in other countries across the world, this surge in demand growth is expected to continue in the coming years.

“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 price.”

Kuan also said the glove manufacturing sector was 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.

“Conscious of this long-term outlook as well as the pressing need for our high-quality gloves to protect front liners in the ongoing fight against the pandemic, Hartalega continues to ramp up our capacity expansion plans via our Nex 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 on-track for completion by October 2020. All remaining examination glove production lines for Plant 7 are targeted to be completed by March 2021.”

Kuan said for the next expansion phase of NGC 2.0, it aims 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.

https://www.thestar.com.my/business/business-news/2020/08/04/hartalega-1q-net-profit--surges-to-rm2197m-strong-demand-over-2-to-3-years
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