KUALA LUMPUR (Feb 18): Hartalega Holdings Bhd (KL:HARTA) on Tuesday reported a 13% decline in its net profit for its third financial quarter ended Dec 31, 2024 (3QFY2025), dragging shares of the world's largest nitrile glove manufacturer to their lowest in over three months.

The stock turned lower as trading resumed following the announcement during the midday market break. Hartalega shares fell nearly 10% to RM3.07 per share, its lowest since Nov 1, 2024, after more than one million shares changed hands. At that price, the group had a market value of about RM10.5 billion.

It saw net profit for 3QFY2025 fall to RM19.51 million, from RM22.38 million a year ago, as operating expenses surged 65.9% year-on-year to RM702.51 million from RM423.45 million in 3QFY2024.

This resulted in lower earnings per share of 0.57 sen for 3QFY2025, compared with 0.66 sen for 3QFY2024.

This was despite quarterly revenue rising 77.6% to RM738.19 million, from RM415.64 million in 3QFY2024.

In a filing with Bursa Malaysia on Tuesday, Hartalega attributed the revenue growth to a significant 73% increase in sales volume during the quarter under review.

No dividend was proposed or declared for 3QFY2025.

For the cumulative nine-month period (9MFY2025), the group posted a net profit of RM60.06 million, compared to a net loss of RM2.39 million a year ago, on the back of a 51% increase in revenue to RM1.97 billion from RM1.31 billion in 9MFY2024.

Hartalega said operating profit turned positive at RM44 million in 9MFY2025, compared to an operating loss of RM11 million in 9MFY2024. "This notable growth in profitability was primarily attributable to the significant revenue growth and improved production efficiencies, partially offset by lower other operating income and adverse foreign exchange fluctuations."

Going forward, Hartalega said an improving demand trend can be seen in the global rubber glove industry, with the commencement of restocking activities across key consumption markets.

"The higher US tariffs on rubber medical glove imports from China, which came into effect in January 2025, are likely to provide further impetus for Malaysian manufacturers to regain footing in the US, the world’s single largest consumer market," it added.

Still, the sector will have to contend with some ongoing headwinds, including persistent global oversupply as market adjustment continues, said Hartalega.

"Strong competition among domestic and regional producers continues to put pressure on average selling prices. Additionally, global shipping constraints driven by geopolitical unrest in the Middle East continue to affect global trade routes and cause shipment delays. Furthermore, front-loading by US customers at the end of 2024 in anticipation of higher tariffs is expected to moderate short-term demand."

Hartalega added that the long-term outlook for the rubber glove sector remains favourable, with the group anticipating a return to, and potentially an expansion beyond the pre-pandemic demand levels, driven by the critical role of rubber gloves in the global healthcare industry. This growth is further bolstered by heightened awareness of hygiene practices, and an expected increase in glove usage globally.

As such, Hartalega will progressively roll out new production lines in the NGC 1.5 facility in Selangor to ensure alignment with prevailing market supply-demand dynamics.

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