KUALA LUMPUR: Hartalega Holdings Bhd's net profit plunged 96.1 per cent to RM88.28 million in the first quarter (Q1) ended June 30, 2022, from the RM2.26 billion recorded in the same quarter a year ago.
Revenue in Q1 shrank 78.3 per cent to RM845.67 million from RM3.9 billion.
Chief executive officer Kuan Mun Leong said the lower revenue was mainly due to the normalising of average selling prices (ASP) and a decline in sales volume of 28 per cent, as compared to Q1 FY22, when both ASP and sales demand hit a record high during the peak of the pandemic.
"The higher operating cost environment further impacted the company's Q1 results amid rising inflationary pressure resulting from the higher electricity and natural gas tariffs, as well as the new minimum wage policy implemented in May 2022," he said in a statement today.
Earnings per share for the current quarter were 2.58 sen, while net assets per share stood at RM1.49 as of June 30, 2022.
Kuan said that in the short term, external headwinds are expected to persist due to higher commodity and raw material prices caused by disruptions to the global supply chain.
Nevertheless, he said the company remains focused on strengthening long-term prospects.
"To this end, we continue to progress with our latest expansion of the NGC 1.5. This will be completed in phases accordingly, conscious of prevailing market supply and demand conditions.
"Over the long run, the NGC 1.5 will enable us to cater to growing structural demand for gloves globally, particularly due to increasing glove usage in emerging markets with a low glove consumption base, as well as higher hygiene awareness among healthcare practitioners in the post-pandemic era," he said.
Kuan said that with these plans in place, Hartalega remains optimistic about longer-term prospects for the sector, given the expected continued post-pandemic growth in demand for rubber gloves.
"In tandem, we will continue to focus on cost optimisation and ramping up automation to enhance operational efficiency and sustainability," he added.