This article first appeared in The Edge Financial Daily on November 9, 2018

KUALA LUMPUR: Hartalega Holdings Bhd reported a 6% year-on-year (y-o-y) net profit rise in the second quarter ended Sept 30, 2018 (2QFY19), despite a strong double-digit revenue growth, after incurring an other operating expense of RM11.1 million and higher finance costs.

Quarterly net profit grew to RM120.22 million from RM113.34 million, while revenue jumped 22% y-o-y to RM714.24 million from RM584.62 million. The group declared a first interim single-tier dividend of 2.2 sen per share, payable on Dec 28 this year.

Hartalega attributed the improved performance to a stronger demand for nitrile gloves and a higher average selling price in tandem with the increase in nitrile cost. Sales volume grew 10.6% during the quarter.

But the impact of these was partially offset by the other operating expense of RM11.1 million — it recorded an other operating income of RM9.1 million a year ago — and as finance costs grew to RM2.52 million from RM1.86 million.

For the first half of FY19, Hartalega’s net profit grew 17% y-o-y to RM245.09 million from RM209.73 million, while revenue rose 20% y-o-y to RM1.42 billion from RM1.19 billion.

In a separate statement, Hartalega managing director Kuan Mun Leong said the group remains confident of the group’s outlook.

“Tapping into this through our continuous expansion plans via our Next Generation Integrated Glove Manufacturing Complex (NGC), we expect to see earnings growth moving forward.

“To this end, three production lines at Plant 5 of the NGC are currently operational, with remaining lines to be progressively commissioned and fully completed by March 2019,” he said.

Kuan also shared the group successfully delivered the first shipment of the world’s first antimicrobial gloves (AMG) to a major German medical supplies company in September. “Potential market share growth for AMG is certainly promising. We are optimistic that on the back of these sustained growth plans, prospects remain bright for the group,” he added.