Hartalega profits rise 70% despite lower sales

Kuala Lumpur — Hartalega Holdings Bhd has reported a strong growth in its operating profit for the fiscal year ended 31 March, helped partly by cost optimisation initiatives.

The Malaysian rubber gloves maker posted a 17.4% year-on-year decline in revenue to RM2.1 billion (€465 million) for the fiscal year, due to “lower ASP and adverse foreign exchange effects."

However, operating profit rose 72.3% year-on-year to RM91.7 million, supported by “higher plant utilisation, efficiency gains from automation and on-going cost optimisation initiatives,” said Hartalega 5 May.

Profit before tax came in at RM117 million, up 134% compared to the previous fiscal year.

Fourth-quarter sales fell 15.7% year-on-year to RM515.4 million, “primarily driven by a 21.3% reduction in the group’s average selling price (ASP) in Malaysian ringgit,” reflecting the strengthening of the Malaysian currency against the US dollar.

Sales volumes rose slightly by 0.5% over the three-month period.

Operating profit for the quarter came in at RM33.9 million, significantly higher than RM9.6 million reported a year before.

The gains were supported by “ongoing cost optimisation initiatives, including tighter cost controls and enhanced operational efficiencies.”

Profit before tax increased to RM50.3 million from RM17.6 million in the prior-year quarter, driven by “improved profit margin and favourable foreign exchange results,” the company said.

Hartalega said it remains confident in the sector’s recovery, citing “the on-going essential demand for gloves in healthcare, industrial and consumer applications.”

The group said it will continue to prioritise operational efficiencies, including “continuous quality enhancements and disciplined cost optimisation initiatives,” to strengthen its competitive position.

At the same time, it warned that “market conditions are expected to remain volatile” due to geopolitical tensions, particularly the ongoing conflict in the Middle East.

These developments have “added uncertainty into global supply chains, energy markets, and trade flows,” while “elevated crude oil prices… are expected to exert upward pressure on key input costs, including nitrile butadiene latex and logistics.”