Hartalega posts net loss in 4Q due to Cukai Makmur


HARTALEGA Holdings Bhd recorded a net loss of RM197.9 million in its fourth quarter ended March 31, 2022 (4Q22), primarily due to the provision of Cukai Makmur.

While revenue for the quarter stood at RM968.7 million, down 58% year-on-year (YoY) from RM2.31 billion in the same period last year due to the normalising average selling price (ASP) mitigated by the increase in sales volume by 9%.

Read more: Hartalega’s 3Q earnings fall 74.6% on lower ASPs, sales

For its full financial year, the group’s net profit was up by 12.1% YoY to RM3.23 billion from RM2.89 billion last year, mainly driven by higher revenue which was partly offset by higher raw material and other operating costs.

The group also registered higher revenue of RM7.89 billion, up 17.7% YoY from RM6.7 billion, mainly contributed by higher ASP in the first half of the current financial year, after offsetting the impact of reduction in sales volume by 22%.

Earnings per share for the full financial year increased to 94.64 sen while the group’s net assets per share stood at RM1.50 as at March 31, 2022.

Read more: Lower sales, ASP hit Hartalega’s 2Q earnings

The board declared a third interim single tier dividend of 3.5 sen per share, with the entitlement date on May 26, 2022, and payable on June 9, 2022. This will bring total dividends to date for the financial year to 3.5 sen per share.

Hartalega CEO Kuan Mun leong (picture) said its bottom line for the 4Q was impacted by the normalisation of ASPs and demand. 

The group expects prospects to remain in financial year 2023 even as the group enters into an endemic phase. 

“For the glove sector, current ASPs seem to have bottomed out and the opening of international borders and easing of travel restrictions is expected to relieve the current shortage of workers, which will be of benefit to Hartalega.

“Taking a long-term view, the structural organic step-up in the global demand for gloves bodes well for the group, in light of increased glove usage from emerging markets with low glove consumption base, complemented by increased awareness on hygiene among healthcare practitioners post-pandemic.

“To meet this demand growth, the group continues to progress in its capacity expansion via the Next Generation Integrated Glove Manufacturing Complex (NGC). To this end, our NGC 1.5 expansion is on track and we target to gradually commission the first production line by 4Q22. The pace of commissioning for NGC 1.5 will depend on the prevailing market situation moving forward,” he said in a statement today.

He added the group continues to face external pressures including the ongoing conflict between Russia and Ukraine, as well as the lockdown in major cities in China as a result of the new wave of Covid-19 cases.

These are expected to have repercussions on the global supply chain which is already strained, thus leading to a rise in global commodity and raw material prices, said Kuan.

“Additionally, the recent implementation of the new minimum wage policy in Malaysia is likely to result in higher operating costs for the manufacturing sector.

“Amid this challenging backdrop, we are focused on cost optimisation, continuous efficiency improvement and automation initiatives across our operations to ensure the sustainability and resilience of the group,” he said.