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KUALA LUMPUR (Aug 4): Hartalega Holdings Bhd reported today a 134% jump in first-quarter net profit to RM219.72 million, from RM94.06 million a year earlier, as revenue increased on higher rubber glove sale volume and average selling prices (ASPs).

In a statement to Bursa Malaysia today, rubber glove manufacturer Hartalega said its revenue rose to RM920.09 million for the first quarter ended June 30, 2020 (1QFY21) from RM640.1 million.

"Profit before tax (PBT) increased significantly by RM151.2 million or 124.3% to RM272.8 million, mainly due to higher sales revenue, lower raw material and energy costs, coupled with the group’s cost control initiative to reduce operation cost in the quarter.

"Moving forward, the group remains optimistic about its longer-term prospects underpinned by growing demand for rubber gloves and its ongoing expansion plans. On the global front, demand for medical supplies such as gloves has surged due to the Covid-19 pandemic. With new cases continuing to soar in the US, Latin America, India and other countries, demand for gloves is expected to continue to grow in the coming years.

"In addition, the sector is expected to undergo a structural step-up in demand on the back of increased glove usage in emerging markets with low glove consumption per capita and heightened hygiene awareness. The overall projected growth in demand is expected to outstrip supply in the next few years,” Hartalega said.

The company said that in line with the growing rubber glove demand globally, the group will continue with its Next Generation Integrated Glove Manufacturing Complex (NGC) capacity expansion plans.

According to Hartalega, Plant 6 of the NGC has commissioned eight out of 12 lines with the remaining production lines to come on stream 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 2.7 billion pieces.

"With the progressive commissioning of Plants 6 and 7, the group’s annual installed capacity is expected to increase from the current 39 billion pieces to 44 billion by the financial year ending March 31, 2022 (FY22).

At Bursa’s 12.30pm break today, Hartalega’s share price settled RM1.62 or 7.9% lower at RM18.88, with a market capitalisation of about RM66.77 billion. Some 14.15 million shares changed hands.

http://www.theedgemarkets.com/article/hartalega-1q-net-profit-rm220m-rm94m-year-earlier
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