Hartalega 1Q profit up on higher sales, capacity

by TMR / graphic by TMR

Hartalega Holdings Bhd posted a 29.5% year-on-year (YoY) jump in net profit to RM124.87 million for its first quarter ended June 30 (1Q19), on the back of higher sales and additional production capacity.

Earnings also benefitted from the lower costs of nitrile, chemical and upkeep of plant and machinery recognised by the glove maker, while revenue grew 17.5% to RM706.35 million against the RM601.04 million recorded in 1Q18.

The higher turnover was attributable to the growing demand for nitrile gloves, continuous expansion in improving production capacity, as well as better sales volume of 20.5%. Hartalega said prospects for the rubber glove manufacturing sector is strong due to increased demand for nitrile gloves, which now accounts for 60% of Malaysian rubber glove exports.

Having already commissioned its fifth plant this month, while construction for the sixth is to follow soon, the group said it will continue to expand its Next Generation Integrated Glove Manufacturing Complex (NGC), a RM2.2 billion project it commissioned back in 2014, in Sepang.

“Plant 5 and Plant 6 will each have an annual installed capacity of 4.7 billion pieces.

“A new plant, Plant 7, is also in the expansion pipeline and will tailor to small orders and focus more on specialty products,” the company said in an exchange filing yesterday.

It said Plant 7 will have an annual installed capacity of 2.6 billion pieces.

“The increasing contribution of NGC to group sales revenue would help to consolidate margins and contribute further to the group’s earnings.”

On May 31, the glove maker launched its antimicrobial gloves in the UK and is working on securing US Federal Drug Administration approval to launch the product in the US.

The company declared a 2.2 sen dividend for 1Q19, up from 1.25 sen in 1Q18. — TMR