Hartalega 2Q net profit jumps more than 4-fold to RM545m

KUALA LUMPUR: Hartalega Holdings Bhd‘s net profit jumped 424% to RM544.96mil in the second quarter ended Sept 30,2020 from RM103.86mil a year ago, riding on the surge in demand due to the on-going Covid-19 pandemic.

The glove maker reported on Tuesday its revenue increased by 89.7% to RM1.34bil from RM709.42mil. Its earnings per share were 15.95 sen compared with 3.09 sen.

In the first half, its net profit rose by 286% to RM764.67mil from RM197.93mil in the previous corresponding period. Its revenue increased by 67.9% to RM2.26bil from RM1.35bil a year ago.

“The group’s performance was propelled by higher sales revenue on the back of increased sales volume and higher average selling price. This was further supported by improved production efficiency, ” it said.

Hartalega CEO Kuan Mun Leong said the Covid-19 pandemic continues to drive heightened global demand for medical supplies, including gloves which are critical personal protective equipment.

In addition to the recent third wave in Malaysia, cases are unfortunately soaring in the US, India, Latin America and Europe. In tandem, the glove sector is experiencing a structural step-up in demand stemming from increased glove usage due to change in users’ behaviour and increased hygiene awareness, he said.

“Against this backdrop, we foresee that the growing demand for gloves will continue, and this is expected to outstrip supply for the next few years.

“To ensure that the group is well-prepared to cater to demand growth, our expansion plans have been accelerated, ” he said.

Kuan said this month, Hartalega marked a critical milestone with the completion of Plant 6 of its Next Generation Integrated Glove Manufacturing Complex (NGC).

Hartalega’s operational efficiencies and project management capabilities were able to bring Plant 6 fully on-stream one year ahead of schedule, he said.

“Moving forward, Plant 7 which caters to specialty products is in the expansion pipeline and will add an annual installed capacity of 2.7 billion pieces.

“We will also be embarking on construction of Plants 8 to 11 on land acquired adjacent to the NGC, which will increase our installed capacity with the addition of 19 billion pieces per annum once completed.

“Our longer-term expansion will be driven by NGC 2.0, with the first production line targeted to be commissioned in the calendar year 2022.

“Looking ahead, the group remains optimistic of prospects for the years to come, underpinned by growing demand for rubber gloves and our strategic expansion plans, ” Kuan said.