PETALING JAYA: Hartalega Holdings Bhd ’s net profit surged 71.6% to RM96.39mil for the first quarter ended June 30 from RM56.18mil a year ago driven by higher sales volume, higher average selling price, a stronger US dollar and improvements in operation efficiencies.
The world’s largest glove maker by market capitalisation has declared a dividend of 2.50 sen from two sen a year ago.
The better results translated to a higher earnings per share of 5.86 sen in the current quarter from 3.42 sen previously.
Revenue jumped 49.6% to RM601.04mil from RM401.83mil a year ago, mainly due to the company’s ongoing expansion in production capacity and an increase in demand.
Hartalega told the stock exchange that the demand for rubber gloves remained strong with healthy demand supply dynamics.
The company noted that the nitrile wave continued, with 60% of Malaysian rubber glove exports denominated in nitrile gloves.
Meanwhile, its Next Generation Integrated Glove Manufacturing Complex (NGC) capacity growth is on track to meet the increasing demand for rubber gloves.
“We have completed the commissioning of NGC Phase 1 comprising Plant 1 and 2 in early 2016 and have completed Phase 2 Plant 3 in June 2017.
“We will begin commissioning the first production line at Plant 4 this month, with the remaining production lines to be commissioned progressively,” Hartalega noted.
Also, Plant 4 is slated for completion in the first quarter of calendar year 2018, which will lift its earnings.
In a separate statement, managing director Kuan Mun Leong said the strategy put in place several years ago to drive organic growth was bearing fruit now.
“Hartalega had the foresight to invest in capacity expansion and thanks to our NGC, we expect to see this momentum strengthen.
“To complement this, our heightened productivity coupled with increasing demand drove our revenue growth, while a higher sales volume and increased operations efficiency helped improve bottom-line results for the quarter,” Kuan noted.
He added that the NGC would continue to fuel growth for the company.
As global glove consumption continues to grow, Kuan said Malaysia has cemented its position as a leader in the industry by the recent supply interruptions from China.
This is evident as Chinese rubber and vinyl glove makers were impacted by China’s strict environmental compliance.
The company also expects the first production line for Plant 5 to come on stream in April 2018, which will expand its capacity by an additional 4.7 billion pieces of gloves per annum.
According to Hartalega’s filings, the glove maker allotted and issued about 2.09 million new ordinary shares for the company’s employee share option scheme.
Hartalega’s shares closed down two sen or 0.28% to RM7.15 yesterday. At this price, the company is worth RM11.76bil.