KUALA LUMPUR: Glove maker Hartalega Bhd's net profit fell marginally in the second quarter due to the increase in raw material prices of both natural and nitrile latex prices.
The company was also hit by unrealised loss in foreign exchange and changes in fair value in forward foreign exchange contracts.
The company recorded RM46.1 milllion net profit for the quarter ended September 30 2011, compared to RM47.1 million previously.
It expects growing demand for nitrile rubber, as opposed to natural rubber, to bolster its financial performance this year.
"The group is confident that global demand for nitrile gloves will grow by 30 per cent in 2011 and we are indeed well positioned to take advantage of such growth prospects," Hartalega managing director Kuan Kam Hon said in a statement yesterday.
Hartalega cautioned, however, that more glove makers were switching to nitrile glove production facilities, potentially overcrowding the market with nitrile glove producers.
The sharp increase in nitrile material price and recent high volatility of the US dollar would mean challenging times ahead.
Hartalega said it will continue to implement its expansion plan to reduce lead times to meet demand and capitalise on the expected increase in demand.
Hartalega will expand its Plant 5, by building two new advanced high capacity glove production lines. They are slated for commissioning by February 2012.
"We also plan to construct a new plant next to our existing plants in Bestari Jaya of which the building plan is still pending approval from the local authority," the company said in its notes to accounts.
Revenue for the period was 25 per cent higher to RM229.5 million from RM184.3 million previously due to continuos expansion plans and increase in demand.
The inventory level increased from RM64.7 million as at March 31 2011 to RM114.5 million as at September 30 2011 due to increase in raw material prices and also as a result of the company's stocking up of raw materials.
The company aims to keep higher inventories to reduce pressure on meeting growing sales demand.
The company was also hit by unrealised loss in foreign exchange and changes in fair value in forward foreign exchange contracts.
The company recorded RM46.1 milllion net profit for the quarter ended September 30 2011, compared to RM47.1 million previously.
It expects growing demand for nitrile rubber, as opposed to natural rubber, to bolster its financial performance this year.
"The group is confident that global demand for nitrile gloves will grow by 30 per cent in 2011 and we are indeed well positioned to take advantage of such growth prospects," Hartalega managing director Kuan Kam Hon said in a statement yesterday.
Hartalega cautioned, however, that more glove makers were switching to nitrile glove production facilities, potentially overcrowding the market with nitrile glove producers.
The sharp increase in nitrile material price and recent high volatility of the US dollar would mean challenging times ahead.
Hartalega said it will continue to implement its expansion plan to reduce lead times to meet demand and capitalise on the expected increase in demand.
Hartalega will expand its Plant 5, by building two new advanced high capacity glove production lines. They are slated for commissioning by February 2012.
"We also plan to construct a new plant next to our existing plants in Bestari Jaya of which the building plan is still pending approval from the local authority," the company said in its notes to accounts.
Revenue for the period was 25 per cent higher to RM229.5 million from RM184.3 million previously due to continuos expansion plans and increase in demand.
The inventory level increased from RM64.7 million as at March 31 2011 to RM114.5 million as at September 30 2011 due to increase in raw material prices and also as a result of the company's stocking up of raw materials.
The company aims to keep higher inventories to reduce pressure on meeting growing sales demand.
