Wednesday August 8, 2012
Hartalega Q1 profit dips
Income marginally down by 2.7%
PETALING JAYA: Hartalega Holdings Bhd's net profit for the first quarter ended June 30 was marginally down by 2.7% to RM53.3mil against the same quarter last year due to more competitive sales pricing and recognition of a net loss in foreign exchange and changes in fair value in forward exchange contracts.
For the quarter under review, the profit before tax margin reduced to 28.2% from 32.2% from a year ago and the recognition of net loss in foreign exchange and changes in fair value in forward exchange contracts of RM1.3mil compared with a net gain of RM3.5mil in the corresponding quarter of the preceding year.
The group's earnings per share for the quarter was 7.30 sen against 7.53 sen last year.
The rubber glove manufacturer recorded a higher turnover of RM247.7mil compared with last year's corresponding quarter of RM219.4mil.
Nevertheless, when compared with the preceding quarter, Hartalega delivered a higher profit after tax of RM53.4mil against RM50.06mil in the preceding quarter.
The group's performance for the quarter was supported by continuous drive towards expanding production capacity in addition to the ongoing switching momentum of customers to nitrile gloves.
A stronger US dollar and an increase in average selling price for the quarter under review compared with the preceding quarter also had a positive impact on the group's performance.
Executive chairman and managing director Kuan Kam Hon said in view of the resilient global demand for nitrile gloves which was currently increasing at an exponential rate, they were bullish on the group's outlook and prospects.
“Indeed, given the strategic expansion plans that we have set in motion we are assured of our growth for the long term, namely with Plant 6 where we expect our first production line to commence operations in September 2012.
“Meanwhile, the remaining nine lines are expected to come on stream by June 2013. With Plant 6 fully operational, we expect to boost our production capacity by 30%, which translates to a further 3.5 billion pieces of gloves per annum,” he said in a statement yesterday.
Going forward, Kuan is excited on the company's Next Generation Glove manufacturing complex (NGC) project.
“We target to commence construction of the NGC in 2013, to be completed in two four years phases.
“This will substantially boost our production capacity and coupled with the in-house technological advances stemming from our innovative research and development efforts, Hartalega will be fully prepared to meet the growing demand for nitrile gloves.
“Our workforce will also see improvements as the NGC will boost our pool of skilled employees via sophisticated training facilities and the implementation of cutting-edge technologies,” he said.
On July 10, the company proposed a final dividend of 3.5 sen per share single tier in respect of the financial year ended 31 March 2012 subjected to the approval of the shareholders at the forthcoming annual general meeting on Aug 14.