Hartalega Holdings Bhd's Next Generation Integrated Glove Manufacturing Complex. (Photo provided by Hartalega)
KUALA LUMPUR: Hartalega Holdings Bhd
, the world’s largest producer of nitrile gloves, posted a 46.99% jump in net profit to RM72.79mil for the third quarter ended Dec 31, 2015 on a combination of a strengthening US dollar, expansion in capacity and an increase in demand.
Its revenue increased 38.97% to RM398.02mil for the period, while earnings per share (EPS) grew to 4.44 sen from 3.2 sen.
On the back of these results, the company has declared a second interim dividend of two sen per share for its financial year ending March 31, 2016 (FY16). The entitlement date is on March 10, 2016 and payable on March 30, 2016. The stock closed unchanged at RM4.98.
In a filing with Bursa Malaysia, Hartalega said the better profits were due to new production lines from its next-generation integrated glove manufacturing complex (NGC) plants. Nonetheless, the operating profit margin fell from 24.9% to 22.7% due to a reduction in the average selling price, arising from lower nitrile material prices and more competitive sales pricing.
On a nine-month basis, net profit increased 26.57% to RM195.88mil on the back of a 30.57% jump in revenue to RM1.1bil. EPS increased to 11.95 sen from 9.99 sen. Thus, on a nine-month basis, the company has given out a total of six sen in dividends as compared to five sen previously.
The company’s net assets per share was at 89.37 sen as of the period.
In a statement, Hartalega’s managing director Kuan Mun Leong said: “Our long-term expansion strategy via the NGC is clearly bearing fruit, as demonstrated by our strong performance over the last few quarters. We have seen good earnings growth with increased contributions arising from the new production lines of the NGC.
“Despite external pressures, including more competitive sales pricing, we are confident that we will continue to deliver sustained earnings, particularly as additional production lines come on-stream,
“Furthermore, with the construction of Plant 3 and 4 of the NGC well underway, we are set to see even further capacity growth in the year ahead, which will enable us to cater to the strong global demand for nitrile gloves.”
The board of Hartalega is optimistic that the company will achieve the internal target growth for FY16.
The company has been manufacturing premium latex gloves since 1988 and currently operates from its plants in Bestari Jaya and Sepang, Selangor.
The company has a current available capacity of producing over 18 billion gloves annually. Hartalega exports to over 40 countries across five continents.
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