KUALA LUMPUR (Nov 7): Glove maker Hartalega Holdings Bhd returned to the black, with a net profit of RM27.7 million for the second quarter ended Sept 30, 2023 (2QFY2024), after registering three consecutive quarters of losses.
For 1QFY2024, it posted a net loss of RM52.47 million.
Revenue for the quarter of RM452.09 million was an improvement of 2.7% from the RM440.04 million registered for the immediate preceding quarter.
Year-on-year, net profit for 2QFY2024 fell slightly by over 2% to RM27.7 million or 0.81 sen per share, from RM28.34 million or 0.83 sen per share a year ago, as global headwinds persisted into the second half of the year.
In a filing with Bursa Malaysia on Tuesday, the glove maker attributed the lower earnings to lower revenue, and wider foreign currency translation difference for foreign operations.
Revenue plunged 29% to RM452.09 million, from RM584.56 million a year earlier, due to lower sales volume and average selling prices (ASPs).
No dividends were declared for the quarter.
For the first half ended Sept 30, 2023 (1HFY2024), Hartalega posted a net loss of RM24.77 million, versus a net profit of RM116.62 million a year ago due to exceptional items.
Notably, the group said it would have recorded a pre-tax profit RM38 million for 1HFY2024, compared with RM171 million a year ago, if the one-off provision for severance pay of RM47 million for Bestari Jaya facility decommissioning recognised in 1QFY2024 was excluded.
Revenue for 1HFY2024 fell 37% to RM892.12 million, from RM1.43 billion a year ago.
Kuan Mun Leong, the chief executive officer of Hartalega, said prevailing headwinds in the glove sector are expected to persist into 2HFY2024, as the industry remains impacted by the ongoing global oversupply and intense competition, putting pressure on ASPs.
“However, recent capacity rationalisation across key domestic manufacturers as well as the exit of some smaller players from the sector have alleviated a certain degree of oversupply pressure on the market,” he said in a statement.
“Our ongoing operational rationalisation exercise is a key initiative under this plan, which entails the decommissioning of our Bestari Jaya facility to consolidate operations at our state-of-the-art Next Generation Integrated Glove Manufacturing Complex in Sepang. This is expected to generate improved operational and cost efficiencies once completed by the first quarter of calendar year 2024, positioning the group for future market recovery,” he added.