Hartalega registers 1Q net loss of RM52.47mil

KUALA LUMPUR: Hartalega Holdings Bhd is banking on various strategic initiatives, including the decommissioning of its Bestari Jaya plant to improve operational efficiencies, as it contends with the ongoing market challenges.

According to Hartalega CEO Kuan Mun Leong, the group will continue to emphasise cost optimisation measures, improving operational efficiencies and accelerating automation initiatives across its operations.

"Alongside this, we are dedicated to advancing our Environmental, Social and Governance (ESG) agenda to drive sustainable growth and strengthen the resilience of the Group," he said in a statement.

The glove maker registered its third consecutive loss-making quarter after posting a net loss of RM52.47mil or loss per share of 1.54 sen in its first financial quarter ended June 30, 2023.

This compares to a net profit of RM88.28mil in the same quarter in 2022.

Revenue in the quarter under review contracted to RM440.04mil from RM845.67mil in the comparative quarter, mainly owing to the lower average selling prices and reduced sales volume.

The group said it also recognised a provision for severance pay of RM47mil during the quarter following the decommissioning of its Bestari Jaya facility.

Kuan expects the current headwinds to persist due to the market imbalance, aggressive competition from regional players and elevated operating costs impacting margins.

"Furthermore, the average selling price for rubber gloves remains very competitive amid minimal success with the incremental cost passthrough," he said.