Hartalega’s Q1 net profit surges over 10-fold to RM2.26bil, revenue at RM3.9bil

Hartalega Holdings Bhd’s net profit increases more than 10-fold to RM2.26 billion in the first quarter ended June 30, 2021 from RM219.72 million net profit a year ago.

KUALA LUMPUR: Hartalega Holdings Bhd’s net profit increased more than 10-fold to RM2.26 billion in the first quarter ended June 30, 2021 from RM219.72 million net profit a year ago.

The rubber glove manufacturer said this was contributed by higher sales revenue and lower utilities expenses, which were partly offset by the increase in raw material price.

Hartalega’s Q1 revenue rose nearly threefold to RM3.90 billion from RM920.09 million on the back of higher average selling price and sales volume.

The company said it would continue to expand its capacity in Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang in tandem with the growing rubber glove demand globally.

“To date, eight out of 10 lines in (Plant 7) have been commissioned. Upon full commissioning, Plant 7 will have an annual installed capacity of 2.7 billion pieces,” it said in a statement today.

Hartalega said construction for the upcoming expansion (NGC 1.5) was underway.

It to commission the first line by December 2021.

“NGC 1.5 expansion plans include four additional production plants which will contribute 19 billion pieces to the annual installed capacity.”

With the completion of NGC 1.5, the company’s annual installed capacity will increase to 63 billion pieces per annum.

Hartalega said the demand for medical supplies such as gloves was expected to remain elevated in the immediate term due to worldwide infections of the delta variant.

Average selling prices for gloves had been declining from its peak moving into second half of the year, it added.

Post pandemic, Hartalega said the sector was expected to undergo a structural step-up in demand on the back of increased glove usage from emerging markets with low gloves consumption per capita and heightened hygiene awareness.

“We will continue to enforce the Covid-19 preventive measures that were put in place to minimise the risk of infection within the operations in Malaysia.

“These include implementing Green Barrier Strategy to further improve segregation measures, enforcing social distancing measures, awareness programme, entry screening procedure, installing thermal scanners at high traffic locations, staggered shift hours and frequent sanitising at common areas,” said Hartalega.

The company said it had entered into a sales and purchase agreements in the previous quarter for the acquisition of about 250 acres of land in Bukit Kayu Hitam, Kedah.

The acquisition marked Hartalega’s latest phase of growth with an investment of RM7 billion to build 16 new manufacturing facilities over the next 20 years.

“Coupled with the earlier investment in Sepang (60 acres) and Banting (95 acres), these acquisitions will enable us to realise our growth plans towards 95 billion pieces by 2027.”

Meanwhile, Hartalega said it had kickstarted the immunisation programme for its workers through the Public-Private Partnership Covid-19 Industry Immunisation Programme (PIKAS) with the support of the International Trade and Industry Ministry.

“To date, over 90 per cent of our workforce have completed the first dose of vaccination. The group expects to complete the second dose of vaccination for our workers by the end of August,” it added.

Source: New Straits Times


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