KUALA LUMPUR: The overcapacity situation in the glove sector persists and operating costs are rising amid intense competition, especially from China and other regional manufacturers, said Hartalega Holdings Bhd
CEO Kuan Mun Leong.
"Ongoing uncertainty surrounding US tariff policies continues to weigh down on demand, especially in the US market, while also prompting a shift in long-term sourcing strategies among US importers," he added in his review of the company's first-quarter (1QFY26) results.
According to Kuan, the company's 1QFY26 performance reflects the ongoing recalibration taking place in the global sector.
Hartalega posted a net profit of RM12.61mil in the quarter under review, a sharp decline from RM31.93mil in the year-ago quarter for an earnings per share of 0.37 sen against 0.94 sen in the comparative quarter.
It said revenue was lower at RM553.11mil in 1QFY26 as compared to RM583.84mil in 1QFY25.
The group said the performance was impacted by a reduction in average selling prices (ASP) as well as lower sales volume, primarily owing to front-loaded inventories held by US customers and deferred orders in response to ongoing tariff developments.
At the same time, pricing pressures intensified in non-US markets, driven by excess supply from Chinese manufacturers.
In addition, operating profit was affected by the lower ASPs, strengthening of the ringgit and less favourable cost absorption resulting from lower capacity utilisation.
Kuan said Hartalega was anchored by its long-term strategy, focusing on enhancing production efficiency and cost optimisation, investing in advanced automation, maintaining robust fiscal discipline, and sharpening its sales approach to strengthen its competitiveness and resilience.
“While near-term conditions are challenging, structural glove demand for rubber gloves continues to hold strong prospects, driven by growing global healthcare needs and hygiene awareness.
"Our focus remains on building long-term value while continuing to uphold best practices in responsible manufacturing and ESG compliance."
