Hartalega’s 3Q net profit surges by 47%

by **Cals** Thu 18 Feb 2016, 01:57

Hartalega’s 3Q net profit surges by 47%

By Billy Toh / The Edge Financial Daily | February 17, 2016 : 10:22 AM MYT

This article first appeared in The Edge Financial Daily, on February 17, 2016.

KUALA LUMPUR: Hartalega Holdings Bhd’s net profit surged 47% to RM72.8 million or 4.44 sen per share for the third financial quarter ended Dec 31, 2015 (3QFY16), from RM49.5 million or 3.2 sen per share a year ago.

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The nitrile glove maker attributed the significant increase in profit to the company’s continuous expansion in production capacity and higher demand.

Quarterly revenue climbed 39% to RM398 million against RM286.4 million in 3QFY15.

It also declared a second interim dividend of two sen per share for its financial year ending March 31, 2016 (FY16), payable on March 30.

“Our long-term expansion strategy via the Next Generation Integrated Glove Manufacturing Complex (NGC) is clearly bearing fruit, as demonstrated by our strong performance over the last few quarters,” said Hartalega managing director Kuan Mun Leong in a statement yesterday.

“We have seen good earnings growth with increased contributions arising from the new production lines of the NGC,” he added.

For the cumulative nine-month period ended Dec 31, 2015 (9MFY16), Hartalega registered a net profit of RM195.9 million or 11.95 sen per share, up 26.6% from RM154.8 million or 9.99 sen per share in 9MFY15.

The company recognised a net foreign exchange loss of RM21 million for 9MFY16, compared with RM5.6 million in the previous corresponding period.

Revenue grew 30.6% to RM1.09 billion from RM840.9 million a year ago.

Looking ahead, Hartalega is bullish on the global demand for nitrile rubber gloves, as there is a switching momentum from latex to nitrile rubber gloves and increasing healthcare requirements.

On the back of the strong demand, Hartalega is optimistic that it will achieve the internal target growth for FY16.

“Despite external pressures, including more competitive sales pricing, we are confident that we will continue to deliver sustained earnings, particularly as additional production lines come on stream,” said Kuan.

“Furthermore, with the construction of Plants 3 and 4 of the NGC well underway, we are set to see even further capacity growth in the year ahead, which will enable us to cater to the strong global demand for nitrile gloves,” he added.