Hartalega's 4Q net profit grows 12%, pays two sen dividend

by **Cals** Wed 04 May 2016, 00:08

Hartalega's 4Q net profit grows 12%, pays two sen dividend

By Gho Chee Yuan / theedgemarkets.com | May 3, 2016 : 7:54 PM MYT

KUALA LUMPUR (May 3): Hartalega Holdings Bhd's net profit for the fourth quarter ended March 31, 2016 (4QFY16) gained 12.3% to RM61.72 million or 3.76 sen per share from RM54.97 million or 3.53 sen per share a year earlier, driven by its continued capacity expansion.

Quarterly revenue ballooned 31% at RM400.43 million, from RM305.11 million a year ago.

The world's largest synthetic glove manufacturer declared a third interim dividend of two sen per share, payable on June 23. This brings the full year dividend to eight sen per share.

For the full financial year ended March 31, 2016 (FY16), its net profit was up 22.8% to RM257.6 million or 15.71 sen per share, from RM209.73 million or 13.48 sen per share in FY15.

Cumulative revenue jumped 36.4% to RM1.5 billion, from RM1.1 billion.

Commenting on the glove maker’s stellar performance, Hartalega's managing director Kuan Mun Leong said the group has increased its production capacity significantly, having successfully completed Plant 1 and 2 of the Next Generation Glove Manufacturing Complex (NGC).

"Despite heightened competition and pricing pressures, given the robust global demand, we are confident that we will be able to tap into the strong prospects for nitrile gloves," Kuan said in a statement today.

According to Kuan, Hartalega is well-positioned to capitalise on opportunities in emerging markets such as China and India, where consumption per capita is relatively low.

"As the NGC progresses with construction of Plant 3 and 4 ongoing, we will continue to unlock potential for the group. We have strategically mapped out our capacity expansion to grow in stages, in tandem with market demand," he said.

Aside from boosting capacity, Kuan said the group is also increasing efficiencies and productivity across organisation by driving for innovation and advanced technology.

In line with this, he said Hartalega has implemented cost management measures on a group-wide basis, in order to realise greater economies of scale and productivity gains.

"With these proactive efforts in place, we are confident [that] we will be able to maintain our leadership position in the nitrile glove segment and deliver growth in the coming financial year," he concluded.

Shares in Hartalega dropped 15 sen or 3.5% at its three months low of RM4.10 today, after 3.75 million shares traded. It had a market value of RM6.78 billion.