KUALA LUMPUR: Hartalega Holdings Bhd’s net profit eased 13.6 per cent in the second quarter (Q2) ended September 30, 2019 to RM103.87 million from RM120.22 million a year ago.
In a filing to Bursa Malaysia, the nitrile glove manufacturer said this was mainly due to lower average selling price and higher packaging and natural gas cost.
Its revenue in the same quarter eased 0.7 per cent to RM709.42 million from RM714.24 million due to to lower average selling price.
For the six month period, Hartalega’s net profit dropped 19.2 per cent to RM197.93 million from RM245.09 million, while its revenue decreased five per cent to RM1.35 billion from RM1.42 billion.
Meanwhile, Hartalega said the company would continue with its Next Generation Integrated Glove Manufacturing Complex (NGC) capacity expansion plans, in line with growing rubber glove demand globally.
It said Plant 5 of NGC facility was fully commissioned during the quarter, while first line of Plant 6 was expected to begin commissioning in Q1 2020 with an annual installed capacity of 4.7 billion pieces.
Hartalega said Plant 7, which had commenced construction, would cater to small orders focusing more on specialty product. It has an annual installed capacity of 3.4 billion pieces.
“With the progressive commissioning of Plant 6 and 7, Hartalega’s annual installed capacity is expected to increase from current 36.6 billion to 44.7 billion pieces by financial year 2022. While market demand has picked up in the second half of 2019, business environment continues to remain challenging with rising operating cost.
“In line with this, Hartalega will continue to embark on cost optimisation to mitigate potential margin pressure,” it added.
Hartalega will also intensify investment into Industry 4.0 technologies to develop automation solutions, IoT technology and AI solutions to reduce dependency on manual labour and enhance operation effectiveness.