KUALA LUMPUR (Feb 6): Synthetic glove maker Hartalega Holdings Bhd today announced a 70.7% jump in quarterly net profit, together with a 4 sen interim dividend payout, and a proposed bonus issue on the basis of one bonus share for every one existing share held.

Its net profit rose to RM113.02 million in the third quarter ended Dec 31, 2017 (3QFY18) from RM66.23 million a year ago, driven by higher sales and improvement in production capacity, as well as lower costs due to improved operational efficiencies.

Quarterly revenue rose 32.2% year-on-year to RM603.14 million from RM456.29 million, due to a 36.2% rise in sales volume. The four sen payout it announced is the second interim dividend for the financial year ending March 31, 2018 (FY18), and is payable on March 28.

In a statement, its managing director Kuan Mun Leong said a strategy that was put in place several years ago by the group is bearing fruit.

“We have timed the market well and this is reflected in our increased sales volume and higher average selling prices for the quarter under review. These were the driving factors which enabled us to deliver strong top and bottom line results,” he said.

The group also revised its dividend policy to pay a minimum 60% of its annual net profit to shareholders, up from the current 45% minimum. The revised policy will take effect in FY18.

For the cumulative nine months period ended Dec 31, 2017 (9MFY18), Hartalega's net profit rose 66.7% y-o-y to RM322.75 million from RM193.62 million, while revenue increased 38.1% y-o-y to RM1.79 billion from RM1.3 billion.

Meanwhile, it said the proposed bonus issuance, which will be based on an entitlement date that will be determined later, is to further enhance liquidity as well as reward shareholders for their continuous support.

"The group's prospects remain bright with nitrile gloves commanding 61% of Malaysian rubber glove exports," said Kuan. "Robust demand is expected to continue, particularly as Chinese vinyl glove producers are facing challenges in light of stricter environmental laws under China’s anti-pollution drive."

He also updated that Hartalega's Next Generation Integrated Glove Manufacturing Complex (NGC) is well on schedule to meet growing demand. "We have completed commissioning of Plant 4 with all 12 production lines operational and construction has commenced on Plant 5. In addition to this, we aim to launch our world-first non-leaching antimicrobial nitrile examination gloves by the second quarter of 2018.”

Hartalega shares slid 52 sen or 4.58% to RM10.84 today, giving it a market capitalisation of RM17.94 billion. Over the past 12 months, the counter has gained about 131.64%.