Hartalega posts RM103.86 mln net profit in Q2, declares dividend

KUALA LUMPUR, Nov 5 -- Hartalega Holdings Bhd, the world's largest nitrile glove manufacturer posted a net profit of RM103.86 million for its second quarter, down 13.6 per cent as compared with RM120.21 million registered in the same quarter previously, due to the lower average selling price and higher packaging and natural gas cost.

For the quarter ended Sept 30, 2019, revenue also edged down to  RM709.42 million from RM714.24 million posted previously.

“Despite the challenging operating environment, market demand improved in the second half of 2019,” Managing Director, Kuan Mun Leong said in a statement today.

For the cumulative six months, net profit was RM197.93 million versus RM245.08 million posted previously and revenue stood at RM1.34 billion as against RM1.42 billion.

The group, he said had also taken tangible steps to mitigate potential margin pressure, which includes continuous cost optimisation measures and enhancing operational effectiveness by increasing investment into Industry 4.0 and advanced technologies and implementing greater automation, reducing the need for manual labour.

Tapping into robust global demand, the group’s strategic capacity expansion plans continue via the Next Generation Integrated Glove Manufacturing Complex (NGC), as Plant 5 was fully commissioned during the quarter under review, he added.

According to Kuan, the first line of Plant 6 is slated for commissioning in the first quarter of 2020, and Plant 7 has also commenced construction. 

“In addition, we continue to see increasing market acceptance for our world-first non-leaching antimicrobial gloves (AMG), recently launched in Shanghai, China.

“Plans are underway to introduce this product in other emerging markets and secure approval from the Federal Drug Administration to enter the US market. Over the long-run, the AMG is expected to contribute positively to the Group.

“While tough market conditions may persist, the Group is positive on long-term prospects as we continue to build on our strong capabilities and proven track record to ensure sustainable growth,” he said.

Hartalega declared a first interim dividend of 1.8 sen per share single tier for its financial year ending  March 31, 2020, as per the entitlement date on  Dec 4, 2019, and payable on  Dec 27, 2019.

-- BERNAMA