HARTALEGA Holdings Bhd (Hartalega) saw its 3Q FY2020 net profit for the period ended Dec 31, 2020 soared 728% to RM1.01 bil from RM122 mil a year ago. At pre-tax level, the glove maker’s profit for the quarter came in at RM1.35 bil while revenue rose to RM2.13 bil.
For the cumulative nine-month period, the group reported a net profit of RM1.78 bil, a significant leap from RM320 mil recorded in last year’s corresponding period. Its pre-tax profit grew to RM2.30 bil while revenue stood at RM4.40 bil.
Hartalega attributed its performance to significantly higher sales revenue stemming from increases in both sales volume as well as average selling price. This was further boosted by lower energy costs and upkeep expenses as a result of continued advancements in productivity.
Earnings per share (EPS) for the third quarter grew to 29.31 sen while cumulative EPS improved to 51.68 sen. Net assets per share stood at RM1.22 as of Dec 31, 2020.
As of December 31, 2020, Hartalega’s shareholders’ funds stood at RM 4.1 bil while its market capitalisation is currently in excess of RM40 bil.
Given the group’s sterling performance, the Hartalega board has declared a second interim single tier dividend of 9.65 sen/share for its financial year ending Mar 31, 2021 as per the entitlement date of Feb 10 with the dividend payable on Feb 26.
Given the impact of the COVID-19 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, according to Hartalga CEO Kuan Mun Leong.
“In light of these circumstances, we expect demand to continue to outstrip supply for the next few years,” he pointed out in a media statement.
“It is clear that the demand for medical supplies such as gloves is not abating given the fact that we are still facing the impact of the COVID-19 pandemic.
“Unfortunately, cases continue to surge in the US, UK, Latin America as well as other nations.”
As the group expects demand to continue unabated for the next few years, Hartalega said it is committed to the expansion plan for its 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,” noted Kuan.
“With the progressive commissioning of Plant 7, our annual installed capacity is expected to increase to 44 billion pieces (of gloves) by FY2022.”
The group has a current capacity of producing over 39 billion gloves annually.
Additionally, Hartalega has entered into two sales and purchase agreements for the acquisition of two pieces of land located in Sepang and Banting measuring about 60 acres and 95 acres respectively.
“These land acquisitions are in line with our efforts to progressively expand our annual installed capacity to 95 billion pieces by 2027,” projected Kuan.
“We are confident that prospects remain strong given the structural step up globally for gloves, specifically nitrile gloves.”
At the close of today’s trading Hartalega was up 68 sen or 5.52% to RM13 with 9.96 million shares traded, thus valuing the company at RM44.43 bil. – Jan 25, 2021
