This article first appeared in The Edge Financial Daily on August 8, 2018

KUALA LUMPUR: Hartalega Holdings Bhd’s net profit rose 29.6% to RM124.87 million in the first financial quarter ended June 30, 2018 (1QFY19) from RM96.39 million a year ago, driven by higher sales achieved with favourable demand and additional production capacity.

Lower costs of nitrile, chemicals and upkeep of plant and machinery have also contributed to the higher profit, it added.

This resulted in higher earnings per share of 3.77 sen for 1QFY19 compared with 2.93 sen for 1QFY18.

Quarterly revenue also increased 17.5% to RM706.35 million from RM601.04 million a year ago in tandem with growing demand for nitrile gloves and continuous expansion in improving production capacity, with an improvement in sales volume of 20.5%.

On July 3, Hartalega proposed a final dividend of 2.2 sen per share for the financial year ended March 31, 2018 (FY18), which is subject to the approval of shareholders in the forthcoming annual general meeting scheduled for Aug 24.

In a filing with Bursa Malaysia yesterday, Hartalega said prospects for the rubber glove manufacturing sector remain strong with increasing demand arising from switching trends towards nitrile gloves.

“Nitrile gloves now account for 60% of Malaysian rubber glove exports. In meeting rising demand, Hartalega’s Next Generation Integrated Glove Manufacturing Complex in Sepang has begun commissioning Plant 5 in August, with construction of Plant 6 to follow.

“Plant 5 and Plant 6 will each have an annual installed capacity of 4.7 billion pieces,” it added.

Hartalega noted that a new plant — Plant 7 — is also in the expansion pipeline and will tailor to small orders and focus more on specialty products.

“Plant 7 will have an annual installed capacity of 2.6 billion pieces,” it said.