CEO Mun said the market environment has prompted Hartalega to start a five-year strategic plan with the goal of enhancing long-term business sustainability and resilience.
PETALING JAYA: Hartalega Holdings Bhd
is optimistic about the long-term prospects of the glove sector and will continue to emphasise on better cost management, improve operational efficiencies and scale up its automation initiatives across operations.
The glove maker’s chief executive officer Kuan Mun Leong said the prevailing headwinds impacting the glove sector would persist into the second half of the financial year.
“The industry remains impacted by the ongoing global oversupply and intense competition, putting pressure on average selling prices (ASPs),” he said in a statement. The oversupply situation in the market is said to has been alleviated following recent capacity rationalisation by key domestic manufacturers as well as the exit of smaller players from the sector.
Mun said the market environment has prompted Hartalega to start a five-year strategic plan with the goal of enhancing long-term business sustainability and resilience while taking into account the ever-changing business environment.
“Our ongoing operationalisation exercise is a key initiative under this plan, which entails the decommissioning of our Bestari Jaya facility to consolidate operations at our state-of-art next generation integrated glove manufacturing complex in Sepang,” he explained.
The project is said to generate improved operational and cost efficiencies once completed by the first quarter of calendar year 2024, and will position the group for a future market recovery.
Hartalega has recorded a revenue of RM452.08mil for the second quarter ended Sept 30, (2Q24), a 22.66% quarter-on-quarter (q-o-q) decline, due to lower sales volume and ASPs.
Its net profit fell 2.29% q-o-q to RM27.69mil or earnings per share of 0.81 sen per share.
Profit before tax for the quarter stood at RM36mil compared with RM37mil in the same quarter last year.
Year-to-date, Hartalega’s revenue for the cumulative period was down 37.62% year-on-year to RM892.12mil, and it recorded a net loss of RM24.77mil and a loss per share of 0.73 sen per share for the period partly due to lower sales volume and ASPs, moderated by lower raw material and labour costs.
Hartalega shares closed 19 sen higher at RM2.33 per share at close yesterday.
