Hartalega quarterly net profit tops RM1bil for the first time as Covid-19 rages on
KUALA LUMPUR: Hartalega Holdings Bhd delivered another record quarterly profit and predicted that demand for medical gloves will continue to outstrip supply for the next few years.
Net profit in the three months ended Dec 31 (Q3FY21) breached RM1bil for the first time ever, as revenue surged to RM2.13bil from RM796mil a year ago.
Earnings per share was 29.3 sen a share and the company has declared an interim dividend of 9.65 sen. a share.
"Given the impact of the pandemic, demand is expected to increase due to a strong uptick in glove usage particularly in emerging markets as a result of heightened hygiene awareness," chief executive officer Kuan Mun Leong said in a statement today.
"We expect demand to continue to outstrip supply for the next few years," he said.
The demand outlook has prompted Hartalega to press on with its capacity expansion plans.
As it is all its production lines at Plant 6 located at its Next Generation Integrated Glove Manufacturing Complex (NGC) near Sepang, Selangor have been fully commissioned, while four out of seven lines at Plant 7 have started operations.
"With the progressive commissioning of Plant 7, our annual capacity is expected to increase 44 billion pieces by FY22," Kuan said.
Its current production capacity stood at 39 billion pieces a year.
The company has also recently acquired two plot of lands in Sepang and Banting respectively, as part of its effort to further increase capacity to 95 billion pieces by 2027.
"We are confident that prospects remain strong given the structural step up globally for gloves, specifically nitrile gloves," Kuan said.
Last month, Hartalega had temporarily suspended some of its production lines at the NGC after 35 of its workers were tested positive for Covid-19.
"To ensure the Group continues to deliver gloves to front liners globally without disruption, the Group will continue to enforce the COVID-19 preventive measures that were put in place in order to minimize the risk of infection within the operations in Malaysia," the company said.
"These include enforcing social distancing measures, awareness programme, entry screening procedure, installing thermal scanners at high traffic locations, staggered shift hours and frequent sanitizing at common areas," it added.
Hartalega also said that it has implemented periodic RTK testing as additional preventive measure to monitor for potential asymptomatic cases.