KUALA LUMPUR (Aug 5): Hartalega Holdings Bhd’s net profit more than halved in the first quarter, hit by weaker prices and lower volume as well as reduced export receipts. The nitrile glove maker also warned of a continuing supply glut.
Net profit for the first quarter ended June 30, 2025 (1QFY2026) stood at RM12.61 million, down 60.1% from a year ago, while revenue slipped 5% year-on-year to RM553.1 million, the group said in a filing with Bursa Malaysia on Tuesday. No dividend was declared for the quarter under review.
Operating profit fell to RM7.7 million, a decline of RM26.9 million compared to 1QFY2025, primarily due to lower ASPs, a stronger ringgit, and less favourable cost absorption amid lower capacity utilisation. The company's bottomline during the quarter was also inflated by gains from the disposal of assets at its Bestari Jaya facility.
The group attributed the earnings slump to persistent overcapacity in the glove sector, intense price competition from Chinese and other regional manufacturers, and muted restocking activity, particularly from US customers who continued to hold front-loaded inventories and defer orders amid ongoing US tariff policy uncertainty.
Despite a temporary truce in US-China trade tensions that took effect in May 2025, Chinese manufacturers have redirected excess supply to non-US markets, adding further downward pressure on ASPs globally, Hartalega added.
"The group remains confident in the sector’s long-term fundamentals, as structural demand for rubber gloves continues to grow steadily, driven by increased global awareness of hygiene and healthcare needs," Hartalega said.
Looking ahead, Hartalega anticipates a gradual recovery in demand in FY2026 as restocking activities pick up, but expects near-term challenges to persist given rising operating costs, stiff regional competition, and uncertain trade dynamics.
Shares of Hartalega settled unchanged at RM1.37 at Tuesday’s midday break, valuing the group at RM4.70 billion.