Hartalega earnings remain subdued on oversupply situation

KUALA LUMPUR: Hartalega Holdings Bhd CEO Kuan Mun Leong reiterated a positive view on the long-term prospects of the company as the oversupply situation continues to weigh on earnings.

"We are confident that we will pull through and punch above these significant market challenges as the capacity rationalisation continues and move towards equilibrium.

"In view of this, we have taken a strategic approach to align our Next Generation Integrated Glove Manufacturing Complex (NGC) 1.5 expansion plan with the current market supply and demand dynamics,” he said in a statement.

In the second financial quarter ended Sept 30, 2022, Hartalega posted a net profit of RM28.34mil, which compares to a net profit of RM914mil in the year-ago quarter.

Earnings per share came to 83 sen compared with 26.74 sen in 2QFY22.

Revenue in the three-month period was down to RM584.56mil versus RM2.01bil a year earlier.

For the six-months ended Sept 30, 2022, Hartalega's net profit slumped to RM116.62mil on the back of RM1.43bil in revenue.

Comparatively, its net profit in the same period last year was RM3.17bil on RM5.91bil revenue.

According to Kuan, global glove usage is expected to rise in emerging markets with a low glove consumption base while heightened hygiene and health awareness among health practitioners will drive demand.

“Going forward, we remain optimistic on longer-term prospects for the sector.

"We hope for the continued conducive environment and business-friendly policies in Malaysia in order for this important sector to remain competitive against heightened competition from other nations,” he added.