HARTALEGA Holdings Bhd posted a profit after tax (PAT) of RM221.1 mil for its first quarter ended June 30, attributed to the high demand of gloves due to the Covid-19 pandemic.
The PAT of RM221.1 mil reflects a jump of 135% from the RM94.2 mil in the corresponding quarter in the previous year. Revenue for 1Q2020 came to RM920.1 mil.
According to a statement by Hartalega, this performance was driven by higher sales revenue, on the back of increased sales volume and higher average selling price.
The group also noted that this was further supported by lower raw material and energy costs, as well as the group’s continuous cost optimisation initiatives.
“Market demand was exceptionally strong during the quarter due to the unfortunate Covid-19 pandemic. With a new wave of cases emerging in the US, Latin America and India, along with upticks in other countries across the world, this surge in demand growth is expected to continue in the coming years.
“Due to the global shortage of gloves, average selling prices are expected to see upward revisions in the coming quarters, in line with prevailing market price,” said Hartalega CEO Kuan Mun Leong.
He said moving forward, the glove manufacturing sector is expected to undergo a structural step-up in demand, on the back of increased glove usage from emerging markets with low glove consumption per capita as well as heightened hygiene awareness.
“As a result, overall projected demand growth is expected to outstrip supply for the next two to three years.”
Hartalega will continue ramping up its capacity expansion plans via its Next Generation Integrated Glove Manufacturing Complex (NGC).
“For Plant 6 of the NGC, eight out of 12 production lines have been commissioned, while for Plant 7, the first production line is on-track for completion by October.
“All remaining examination glove production lines for Plant 7 are targeted to be completed by March 2021,” he said.
For the next expansion phase of NGC 2.0, Hartalega is aiming to commission the first production line in the first half of 2022. The NGC 2.0 facility will provide an annual installed capacity of 32 billion pieces once completed, added Kuan.
At 3.37pm, Hartalega’s shares were last done at RM19.86, down 64 sen, with 31.3 million shares traded. – Aug 4, 2020
