CEO Kuan said the group would continue to align its Next Generation Integrated Glove Manufacturing Complex 1.5 expansion plan with the current market supply and demand dynamics.
PETALING JAYA: 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,” chief executive officer Kuan Mun Leong said in a statement.
He reiterated that the group would continue to align its Next Generation Integrated Glove Manufacturing Complex 1.5 expansion plan with the current market supply and demand dynamics.
This came as the nitrile glove maker posted a net loss of RM31.91mil or loss per share of 0.93 sen for the third quarter ended Dec 31, 2022 (3Q22) versus a net profit of RM259.06mil or earnings per share (EPS) of 7.58 sen recorded in the previous corresponding quarter.
Revenue in the quarter under review was 54% lower year-on-year at RM461.84mil as sales eased due to inventory drawdown by glove traders.
Kuan said the fall in revenue and earnings was primarily due 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 an EPS of 2.48 sen versus RM3.43bil net profit or an EPS of RM1.04 sen in the previous corresponding period.Revenue for the nine months stood at RM1.89bil or 73% lower y-o-y compared with RM6.92bil recorded for 9M22.
Kuan added market conditions remained tough as the glove sector continues to be impacted by the current softened ASP due to the ongoing global oversupply situation.
“This is compounded by increased energy costs for both natural gas and electricity tariffs, as well as the implementation of the new minimum wage policy, resulting in increased pressure on operating margins for glove manufacturers,” Kuan added.
Hartalega closed four sen lower at RM1.58 a share yesterday.
