KUALA LUMPUR (May 7): Hartalega Holdings Bhd’s net profit for the fourth quarter ended March 31, 2019 (4QFY19) fell 22% year-on-year to RM91.36 million from RM116.65 million, despite higher revenue, no thanks to increased costs and a sharply stronger ringgit during the quarter. 

Earnings per share fell to 2.75 sen, from 3.53 sen in the previous year. Revenue came in 11% higher at RM683.89 million, versus RM616.84 million a year ago.

The board declared a third interim dividend of 1.9 sen per share for FY19, which will be payable on June 27.

In a statement, Hartalega’s managing director Kuan Mun Leong said the quarterly results were within expectations, particularly given the sharp strengthening of the ringgit in a short frame of time. "Higher costs for labour and electricity, as well as lower gain from foreign exchange, also affected the group’s bottom line," he added.

Despite this, he said the group achieved a strong financial year, driven by improved sales volume, in tandem with growing demand for nitrile gloves and the group's continuous expansion in production capacity via its Next Generation Integrated Glove Manufacturing Complex (NGC).

Its FY19 net profit climbed 4% y-o-y to RM456.2 million against RM438.92 million, as revenue rose 18% to RM2.83 billion from RM2.41 billion.  

“Looking ahead, we are fully cognisant of where the market is headed. As such, we have put in place sustainable long-term growth plans, as we move forward with our capacity expansion plans for the NGC, conscious to keep pace with market supply and demand dynamics.

“We have successfully commissioned 10 out of 12 production lines for Plant 5, with the remaining lines to come on-stream progressively. 

“Construction of Plant 6 has also commenced, to be followed by supporting facilities in the second half of 2019. Furthermore, our world-first innovation, the antimicrobial glove, continues to see growing market acceptance. We are optimistic this will contribute positively to the Group’s earnings in the coming year,” Kuan said.

The group has also embarked on various cost optimisation measures and automation initiatives to mitigate potential margin pressure. “Given our inherent strengths, we are confident that the group will continue to deliver sustained earnings,” he added.

Hartalega shares closed seven sen or 1.41% higher at RM5.05 today, for a market value of RM16.9 billion. Year to date, the stock has retreated 18.05%.