Hartalega’s 3QFY21 net profit surges to record high

By NUR HANANI AZMAN / Pic By HUSSIEN SHAHARUDDIN

HARTALEGA Holdings Bhd’s quarterly earnings surged seven-fold to a record high of RM1 billion yesterday helped by an increase in sales volume and higher selling prices for its nitrile rubber gloves.

Revenue for its third quarter ended Dec 31, 2020 (3QFY21), grew 167.4% year-on-year to RM2.13 billion, its exchange filing yesterday showed.

Hartalega declared a second interim single-tier dividend of 9.65 sen compared to 1.8 sen in the corresponding quarter a year ago.

Its CEO Kuan Mun Leong (picture) attributed the company’s solid performance to increases in sales volume and average selling price experienced during the Covid-19 pandemic period.

“This was further boosted by lower energy costs and upkeep expenses as a result of continued advancements in productivity,” he said in a statement.

Kuan said the demand for medical supplies, such as gloves, is not abating as the world is still reeling from the impact of the Covid-19 pandemic.

“Cases continue to surge in the US, UK, Latin America and other nations. 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. In light of these circumstances, we expect demand to continue to outstrip supply for the next few years,” he said.

On a year-to-date basis, Hartalega’s nine-month (9MFY21) net profit stood at RM1.77 billion versus RM319.2 million in 9MFY20, while turnover doubled to RM4.4 billion from RM2.15 billion.

Kuan said the group remains optimistic of its longer-term prospects, underpinned by growing demand for rubber gloves and ongoing expansion plans.

“We expect demand to continue unabated for the next few years and we are committed to our expansion plans for our Next Generation Integrated Glove Manufacturing Complex (NGC).

“All 12 production lines in Plant 6 of NGC have been fully commissioned, while four out of 10 lines in Plant 7 have come on stream,” he said.

With the progressive commissioning of Plant 7, Hartalega’s annual installed capacity is expected to increase to 44 billion pieces by the financial year 2022.

The company has entered into two sales and purchase agreements for the acquisition of two pieces of land located in Sepang and Banting, measuring 60 acres and 95 acres (38.44ha) respectively.

These land acquisitions are in line with its efforts to progressively expand its annual installed capacity to 95 billion pieces by 2027.

“We are confident prospects remain strong given the structural step-up globally for gloves, specifically nitrile gloves,” Kuan said.

Hartalega’s share price ended 5.52% or 68 sen higher at RM13 yesterday, valuing the company at RM44.56 billion.