KUALA LUMPUR (Nov 8): Hartalega Holdings Bhd saw its net profit for the second quarter ended Sept 30, 2022 (2QFY23) plummet 96.9% to RM28.3 million, as lower average selling price (ASP) of gloves and volume eroded revenue while higher energy costs hit its bottom line.

Its revenue for the quarter was slashed by 70.9% year-on-year (y-o-y) to RM584.56 million from RM2.01 billion, its Bursa Malaysia filing on Tuesday (Nov 8) showed.

Earnings per share shrank to 0.8 sen from 26.7 sen.

"For [2QFY23], the group's revenue was mainly attributed to the lower ASP coupled with a decrease in sales volume by 27% compared with the corresponding quarter in the previous year (2QFY22)," said Hartalega in a statement on the results.

Meanwhile, its cumulative net profit for the six months ended Sept 30, 2022 fell 96.3% to RM116.62 million, from RM3.17 billion, underpinned by a significant contraction in revenue, higher natural gas tariffs and minimum wage.

Cumulative revenue was slashed by 75.3% to RM1.43 billion, from RM4.48 billion.

Hartalega chief executive officer Kuan Mun Leong said the group is confident of pulling through market challenges as capacity rationalisation continues and is moving towards equilibrium.

"We have taken a strategic approach to align our Next Generation Integrated Glove Manufacturing Complex 1.5 expansion plan with the current market supply and demand dynamics," he said.

"In tandem, we are continuing with our efforts in reinforcing our competitive advantages. These include ramping up automation to maximise productivity as well as to achieve energy and cost optimisation."

He said the group remains positive about the long-term prospects of global glove usage as it is expected to rise in emerging markets with a low glove consumption base along with heightened hygiene and health awareness.

"Going forward, we remain optimistic about longer-term prospects for the sector," added Kuan.

As of the time of writing on Tuesday, Hartalega's share price increased four sen or 2.03% to RM2.01, with its market capitalisation at RM6.89 billion.