KUALA LUMPUR, 8 November 2022 – Due to the lower revenue and increased energy expenses, Hartalega Holdings Bhd’s net profit decreased by 96.9% year on year (YoY) to RM28.34 million for the second quarter (Q2) ended Sept 30, 2022 (FY23) from RM 914 million the previous year.
Its sales decreased by 70.9 percent to RM 584.56 million from RM2.01 billion, led down by lower average selling price (ASP) due to overstock in the face of fierce market rivalry. Hartalega stated in a statement today that the fall was partly attributable to a 27% decrease in sales volume compared to Q2FY22.
Rising energy expenses, such as a rise in natural gas rates, as well as the implementation of a minimum wage legislation, were identified by the firm as having a negative impact on its performance.
As a consequence of rising operational expenditures, the company’s net profit decreased by 96.3 percent to RM 116.62 million for the six-month period from RM3.17 billion the previous year.
Meanwhile, group revenue decreased by 75.8 percent year on year to RM1.43 billion from RM5.91 billion the previous year. Hartalega Chief Executive Officer, Kuan Mun Leong stated that the company was not immune to the present global glut. “However, we are confident that we will pull through and punch above these significant market challenges as capacity rationalization continues and moves towards equilibrium,” Kuan said in a statement.
“In light of this, we have taken a strategic approach to align our Next Generation Integrated Glove Manufacturing Complex (NGC) 1.5 expansion plan with the current market supply and demand dynamics.”
The firm is continuing its efforts to strengthen its competitive advantages, which include increasing automation to maximize production while also achieving energy and cost efficiencies.
Despite the current pent-up inventory and increased industry rivalry, Kuan stated that the business was optimistic about the long-term prospects since worldwide glove usage was likely to develop in emerging economies with a low glove consumption base.
“In the long run, increased cleanliness and health awareness among health practitioners will drive demand and volume growth for gloves.” Going forward, we remain bullish on the sector’s long-term prospects.
“We hope for a sustained accommodating atmosphere and business-friendly policies in Malaysia so that this key industry can compete against increased competition from other nations,” he said.
For more daily news, visit to: Money Compass
To learn more financial knowledge, subscribe to ULearn Money