KUALA LUMPUR: Hartalega Holdings Bhd has registered a 2% drop in net profit for its second quarter ended Sept 30 to RM46.1 million from RM47.1 million in the previous corresponding period. Revenue was higher by RM45.23 million or 24.5% at RM229.54 million compared with RM184.31 million a year ago.
The group told Bursa Malaysia yesterday its gross profit margin was reduced to 26% from 33% due to increases in raw material prices of both natural rubber and nitrile.
It added that the lower earnings for 2Q were compounded by the recognition of net unrealised loss in foreign exchange and mark to market changes in fair value in forward foreign exchange contracts of RM8.7 million, compared with a net unrealised gain of RM1.6 million in the previous corresponding quarter.
For the six-month period, Hartalega’s net profit increased 13.88% to RM100.9 million against RM88.6 million a year ago.
The group also registered higher revenue of RM448.9 million, a 27% growth compared with RM354.3 million previously. According to a statement, the increase is a result of the group’s continuous expansion in production capacity and constant improvement in manufacturing efficiencies.
The group said it plans to construct next to its existing plants in Bestari Jaya a new facility for which the building plan is still pending approval from the local authority. Hartalega said it added new advanced high-capacity glove production lines to its plant 5 which start operations by February.
Managing director Kuan Kam Hon said the group’s earnings were within expectations, given the increase in raw material costs for nitrile gloves, compounded by the unrealised foreign exchange loss due to adverse fluctuations of the dollar.
“The actual amount of any loss or gain will depend on the future movements of the US dollar rate. However, we are confident that the impact will be mitigated by an increase in revenue and operating profit arising from the weaker ringgit.
“In fact, if we normalise our profit before tax to remove the impact of unrealised foreign exchange losses, the normalised PBT would be RM68.3 million compared with last year’s normalised PBT of RM59.4 million, representing a growth of 15%,” he said.
He added that on a six-month comparative analysis between the corresponding fiscal years, there have been significant improvements to the group’s bottom line and top line despite adverse conditions affecting the glove manufacturing sector.
This article appeared in The Edge Financial Daily, November 9, 2011.
The group told Bursa Malaysia yesterday its gross profit margin was reduced to 26% from 33% due to increases in raw material prices of both natural rubber and nitrile.
It added that the lower earnings for 2Q were compounded by the recognition of net unrealised loss in foreign exchange and mark to market changes in fair value in forward foreign exchange contracts of RM8.7 million, compared with a net unrealised gain of RM1.6 million in the previous corresponding quarter.
For the six-month period, Hartalega’s net profit increased 13.88% to RM100.9 million against RM88.6 million a year ago.
The group also registered higher revenue of RM448.9 million, a 27% growth compared with RM354.3 million previously. According to a statement, the increase is a result of the group’s continuous expansion in production capacity and constant improvement in manufacturing efficiencies.
The group said it plans to construct next to its existing plants in Bestari Jaya a new facility for which the building plan is still pending approval from the local authority. Hartalega said it added new advanced high-capacity glove production lines to its plant 5 which start operations by February.
Managing director Kuan Kam Hon said the group’s earnings were within expectations, given the increase in raw material costs for nitrile gloves, compounded by the unrealised foreign exchange loss due to adverse fluctuations of the dollar.
“The actual amount of any loss or gain will depend on the future movements of the US dollar rate. However, we are confident that the impact will be mitigated by an increase in revenue and operating profit arising from the weaker ringgit.
“In fact, if we normalise our profit before tax to remove the impact of unrealised foreign exchange losses, the normalised PBT would be RM68.3 million compared with last year’s normalised PBT of RM59.4 million, representing a growth of 15%,” he said.
He added that on a six-month comparative analysis between the corresponding fiscal years, there have been significant improvements to the group’s bottom line and top line despite adverse conditions affecting the glove manufacturing sector.
This article appeared in The Edge Financial Daily, November 9, 2011.
