Hartalega posts 3Q net loss of RM31.91mil as soft demand continues to bite

KUALA LUMPUR: Hartalega Holdings Bhd remains optimistic of its long-term prospects as it expects demand growth to resume once the market reaches an equilibrium.

"Post-pandemic growth in global demand is expected on the back of increased glove usage, particularly in emerging markets with a low glove consumption base, as well as improved hygiene and health awareness among healthcare practitioners," said CEO Kuan Mun Leong in a statement.

He reiterated that the group will continue to align its Next Generation Integrated Glove Manufacturing Complex (NGC) 1.5 expansion plan with the current market supply and demand dynamics.

In the third quarter of its 2023 financial year ended Dec 31, 2022, the glove maker reported a net loss of RM31.91mil as compared with a net profit of RM259.06mil in the previous corresponding quarter.

The group recorded a loss per share of 0.93 sen as compared with an earnings per share of 7.58 sen in the 3QFY22.

Revenue in the quarter under review was RM461.84mil, which was less than half the revenue of RM1bil in the comparative quarter last year.

Kuan said this was owing to the significant moderation of average selling price and lower sales volume, along with higher energy and labour costs.

He also attributed the weaker performance to intensifying competition in the glove sector, with softer sales demand owing to excess glove inventories and stock adjustment in the supply chain, further affecting the group’s performance

Over the nine-month period to Dec 31, 2022, Hartalega posted a net profit of RM84.71mil compared with RM3.43bil in the previous corresponding period.

Revenue came to RM1.89bil as compared with RM6.92bil in 9MFY22.

“Market conditions indeed remain tough as the glove sector continues to be impacted by the current softened ASP due to ongoing global oversupply situation.

"This is compounded by increased energy costs for both natural gas and electricity tariffs, as well as implementation of the new minimum wage policy, resulting in increased pressure on operating margins for glove manufacturers," said Kuan.

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Hartalega , glove , demand , Kuan Mun Leong


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