KUALA LUMPUR: Hartalega Holdings Bhd’s net profit tumbled 74.1% to RM259.06mil in its third quarter ended Dec 31, 2021, from RM1bil a year ago due to lower average selling price (ASP) and reduced sales volume for gloves.

       In a filing with Bursa Malaysia yesterday, the group said its revenue plunged 52.8% to RM1.01bil during the quarter, compared with RM2.13bil in the corresponding period a year ago.

       Chief executive officer Kuan Mun Leong said average selling prices (ASPs) continued to decline from its peak in the first half of its current financial year, which was dragged down by lower sales demand and increased supply from both major and new glove manufacturers.

       “In addition, buyers have continued to adjust inventories as a result of the lower selling price.

       “Furthermore, with the recent gazettement of the one-off prosperity tax, this is expected to have a material impact on earnings in the final quarter of our current financial year,” he added.

       For the nine-month period ended Dec 31, 2021, the glove maker’s net profit jumped 94.3% to RM3.43bil compared to RM1.77bil a year ago, driven by higher ASPs in the first half of the financial year, offsetting the rise in raw material cost.

       Its revenue also rose 57.4% to RM6.92bil in the nine-month period compared with RM4.40bil in the corresponding period a year ago.

       Moving forward, Kuan said the group would focus on its strategic long-term expansion plan to cater for the structural organic step-up in global demand for gloves, as glove usage would see an uptick in emerging markets due to growing hygiene awareness.

       “With this in view and conscious of market supply and demand dynamics, we continue to expand our capacity, driven by our next-generation integrated glove manufacturing complex (NGC),” he noted.

       In addition to the six plants which are fully completed at the NGC, eight out of nine lines of Plant 7 have been commissioned.

       Once fully commissioned, Plant 7 would have an annual installed capacity of 2.6 billion pieces of gloves.

       Currently, the construction of the upcoming expansion NGC 1.5 is underway, with the first line to be commissioned by October this year.

       Kuan noted that the NGC 1.5 expansion will house four production plants, which would contribute 19 billion pieces to its annual installed capacity.

       As such, he said the annual installed capacity would jump to 63 billion pieces per year with the completion of NGC 1.5 in the next three to four years.

       Kuan said the group would focus on improving efficiency and automation across its operations.

       “We remain optimistic about the longer-term prospects, underpinned by growing demand for rubber gloves and the ongoing expansion plan,” he said.

       Hartalega also declared a second single-tier dividend of 14.80 sen per share for the financial year ending March 31, 2022, to be paid on March 9.