Hartalega posts all-time high 1Q net profit of RM2.3b

HARTALEGA Holdings Bhd kicked off its new financial year on a strong note, delivering a record-high net profit of RM2.26 bil for its 1Q FY3/2022 or a 923% year-on-year jump (1Q FY3/2021: RM221.06 mil) on the back of a strong revenue growth of RM3.9 bil (1Q FY3/2021: RM920.08 mil).

The group’s improved performance for the quarter was primarily due to higher sales revenue considering higher average selling prices (ASP) and increased sales volume although this was partially offset by the increase in raw material prices.

The glove maker’s earnings per share (EPS) for the first quarter grew to 66.08 sen while its net assets per share stood at RM1.91 as of June 30, 2021.

“Moving forward, while average selling prices for nitrile gloves have been declining from its peak, global demand is expected to remain heightened, particularly due to new waves of cases with COVID-19 variants affecting countries worldwide,” commented Hartalega’s CEO Kuan Mun Leong.

Kuan Mun Leong

“For the longer-term, the structural step-up in demand in the glove sector will further spur demand growth, driven by increased glove usage from emerging markets with low glove consumption per capita and increased hygiene awareness.”

To cater to this demand growth, Hartalega will continue to progress with its expansion plans via its Next Generation Integrated Glove Manufacturing Complex (NGC) and NGC 1.5, according to Kuan.

To date, eight out of 10 lines of Plant 7 of the NGC have been commissioned. Once fully completed, Plant 7 will have an annual installed capacity of 2.7 billion pieces.

In addition, construction for its upcoming expansion, NGC 1.5, is currently underway with the first production line targeted to be commissioned by December 2021.

“Once NGC 1.5 is fully completed, it will comprise four manufacturing facilities contributing 19 billion pieces of gloves to our annual installed capacity,” projected Kuan. “With these expansion plans in place, the group’s annual installed capacity is expected to increase to 63 billion pieces over the next two to three years.”

To date, over 90% of Hartaega’s workforce, including our migrant workers, have completed the first dose of vaccination with the second dose of vaccination targeted to be completed by end-August 2021.

At 3pm, Hartalega was unchanged to RM7.03 with 14.89 million shares traded, thus valuing the company at RM24.04 bil. – Aug 3, 2021

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