Hartalega’s 2Q earnings driven by capacity expansion


Hartalega Holdings Bhd’s earnings improved markedly for its second quarter (2Q) due to expanded capacity, coupled with the higher sales volume and average selling prices.

For the quarter ended Sept 30, the world’s largest nitrile glove producer’s net profit jumped 59.1% year-on-year (YoY) to RM113.34 million as revenue climbed 33.8% YoY to RM584.6 million.

Hartalega MD Kuan Mun Leong (picture) said the company’s fiscal performance was supported by its Sepang-based Next Generation Integrated Glove Manufacturing Complex (NGC).

“This sterling performance was driven by our continuous expansion in production capacity via our NGC,” Kuan said in a statement yesterday.

Increased sales volume and higher average selling prices coupled with rising demand and the strengthening US dollar further contributed to Hartalega’s results, he added.

The company has invested RM2.2 billion in the Sepang facility since 2014 with the goal of boosting annual capacity to 42 billion pieces over the coming years. Hartalega now produces 29 billion pieces per year.

The complex is to have a total of six plants by 2021 with 12 lines each respectively, with the fourth plant running five lines at present and the fifth scheduled to become operational by June next year.

“With the NGC underpinning our growth for the coming years and driving greater productivity and manufacturing efficiency, we are wellprepared to meet the growing global demand for high-quality nitrile gloves,” Kuan said.

The remaining NGC plants are progressively commissioned and Kuan is confident this will deliver sustained growth.

Nitrile gloves currently account for 61% of all Malaysian rubber glove exports.

The company declared a first interim dividend of 3.5 sen per share to be paid on Dec 28 this year.

Hartalega’s shares closed at a five-year high yesterday at RM8 a share, up 24 sen, giving it a market capitalisation of RM13.21 billion.