JUST TODAY, Kenanga reported that Hartalega Holdings Bhd (HARTA) posted a stronger set of FY26 earnings, recording a net profit of RM103 mil, representing a 38% year-on-year increase.
After stripping out one-off items such as the RM22 mil gain from the disposal of assets at its Bestari Jaya facility, along with fair value gains from investments, the company’s core net profit stood at RM81 mil, up 20% from the previous year.
This came in 12% above our full-year earnings projection, although it was still 9% below consensus expectations.
The better-than-expected performance versus our forecast was largely attributed to stronger margins.
Notably, this quarter marks HARTA’s third straight quarter of margin expansion, signalling improving operational efficiency.
We believe the margin improvement seen in 4QFY26 was mainly supported by ongoing upgrades to its production lines, particularly through enhanced automation efforts.
Management’s continued focus on cost optimisation and production efficiency is beginning to show tangible results, providing encouraging signs that earnings recovery could continue in the coming quarters.
An interim DPS of 1.8 sen was declared. its 4QFY26 revenue fell 2% due to lower ASP (-0.6%) (due to forex i.e. stronger MYR vs. USD) but negated by higher sales volume (+2.7%).
EBITDA rose 20% to RM84 mil, due to better economies of scale, ongoing cost optimisation initiatives and continuous automation efforts that enhanced production efficiency.
This brings 4QFY26 core profit to RM33 mil (+6% QoQ). YoY, its FY26 revenue slipped 17% due to lower sales volume (-8%) and ASP (-10%).
Due to the pent-up demand, it has commenced to restart Plant 3 which was hibernated since May 2025.
It is looking to mobilise workers who have idle time, and redesign the workflow in order to ensure higher productivity. The production capacity is expected to increase from 27 bil to 30 bil pieces by end FY27.
In order to enhance operational efficiencies and reduce cost, measures included revamping its auto stripping machine, installing AI-vision system to detect defects and digitalisation initiatives across its operations.
As part of its plant revamp strategy, Plant 9 has gone live, and we expect full-quarter impact from cost optimisation to be felt in upcoming 1QFY26. —May 6, 2026
Main image: fifthperson.com
