Hartalega net profit, revenue rise in FY22

KUALA LUMPUR, May 10 — Hartalega Holdings Bhd’s net profit rose to RM3.23 billion in the financial year ended March 31, 2022 (FY22) from RM2.89 billion in the preceding year, driven mainly by higher revenue, which was partly offset by higher raw material and other operating costs.

The glove producer’s revenue for FY22 increased to RM7.89 billion from RM6.70 billion previously, contributed mainly by higher average selling price (ASP) in the first half of FY22, after offsetting the impact of a 22 per cent reduction in sales volume.

Earnings per share for the full financial year rose to 94.64 sen from 84.43 sen last year, net assets per share stood at RM1.50 as at March 31, 2022.

However, the company slipped into a net loss of RM197.90 million in the fourth quarter versus a RM1.12 billion net profit a year earlier due to a prosperity tax provision.

Revenue for the quarter also fell to RM968.69 million against RM2.31 billion a year earlier mainly due to normalising ASP mitigated by a 9.0 per cent increase in sales volume.

Hartalega chief executive officer Kuan Mun Leong said normalisation of ASPs and normalised demand impacted the fourth quarter’s bottomline.

“Nevertheless, as we look towards financial year 2023, we expect prospects to remain, even as we enter into the endemic phase.

“For the glove sector, current ASPs seem to have bottomed out and the opening of international borders, and easing of travel restrictions is expected to relieve the current shortage of workers, which will be of benefit to Hartalega,” he said in a statement today.

Kuan said the group is focusing on cost optimisation, continuous efficiency improvement and automation initiatives across its operations to ensure its sustainability and resilience amid a challenging backdrop. 

He added that Hartalega continues to face external pressures, including the ongoing Russia-Ukraine conflict and lockdowns in major Chinese cities due to new Covid-19 cases.

“Additionally, the recent implementation of the new minimum wage policy in Malaysia is likely to result in higher operating costs for the manufacturing sector,” said Kuan.

On a long-term view, he noted that the structural organic step-up in the global demand for gloves bodes well for the group, in light of increased glove usage from emerging markets with low glove consumption base, complemented by increased awareness on hygiene among healthcare practitioners post-pandemic.

“To meet this demand growth, the group continues to progress in our capacity expansion via our Next Generation Integrated Glove Manufacturing Complex (NGC). To this end, our NGC 1.5 expansion is on track and we target to gradually commission the first production line by the fourth quarter of 2022.

“The pace of commissioning for NGC 1.5 will depend on the prevailing market situation moving forward,” added Kuan.

Hartalega declared a third interim single tier dividend of 3.5 sen per share for its FY22, with the entitlement date on May 26, 2022 and payable on June 9, 2022. This will bring total dividends to date for the financial year to 53.5 sen per share. — Bernama