Hartalega returns to profit despite weaker sales

Kuala Lumpur – Hartalega Holdings Berhad returned to profit in the second quarter of fiscal 2026, helped by lower raw material costs and cost optimisation efforts and despite a double-digit drop in revenue.

For the three months ended 30 Sept, Hartalega reported revenue of RM540 million (€112.7 million), down 17.2% from the same period last year.

The decline was mainly due to a 13% reduction in sales volume, caused by “competitive pricing pressure in non-US markets.”

Revenue was also impacted by a 5% fall in average selling prices, as a result of stronger Malaysian ringgit against the US dollar.

The group recorded an operating profit of RM13.7 million for the quarter, a turnaround from a loss of RM26.7 million a year earlier.

The improvement was mainly driven by cost optimisation initiatives to drive unit cost down and improve operational efficiency.

Profit before tax rose to RM23.5 million from a loss of RM47.5 million, reflecting lower material costs, improved hedging, and efficiency gains.

For the first half of fiscal 2026, Hartalega’s revenue totalled RM1.09 billion, down 11.6% year-on-year, due to lower volumes and currency impact.

However, operating profit surged 171% to RM21.4 million, supported by higher plant utilisation and ongoing automation and cost-saving measures.

Sequentially, second quarter revenue fell 2.4%, but profit before tax increased nearly 64% as cost improvements offset the impact of currency movements.

Hartalega said it remains optimistic about the long-term prospects of the glove industry, noting that global demand has surpassed pre-pandemic levels as stockpiles deplete and restocking activity resumes.

While competition continues to intensify within the sector, glove demand remains “resilient and stable,” the company said.

However, it warned that short-term demand could be influenced by uncertainties over US tariff policies and competition from Chinese producers expanding into Southeast Asia.

“Despite headwinds from global overcapacity, rising competition from Chinese glove manufacturers expanding into Southeast Asia, and escalating operating costs, the group remains well positioned to weather these pressures,” said the gloves maker.