Hartalega records RM50.7mQ3 net earnings

KUALA LUMPUR: Hartalega Holdings Bhd, a rubber glove maker, registered a flat growth in its third-quarter net profit, due partly to the increase in raw material prices and more competitive sales pricing.

The company posted a net profit of RM50.7 million for the third quarter ended December 31 2011. Its revenue, however, jumped 28 per cent to RM241.95 million during the quarter.

For the nine-month period, revenue gained 27 per cent to RM690.85 million, while net profit rose 10 per cent to RM151.6 million.

The significant revenue growth was in line with continuous expansion of the group's production capacity and the increase in demand.

"However, the profit-before-tax margin reduced to 26.4 per cent from 33.1 per cent due to the increase in raw material prices of nitrile latex and more competitive sales pricing for the current quarter compared with the corresponding quarter of the preceding year," said Hartalega said in its filing to Bursa Malaysia yesterday.

The company's third-quarter pre-tax profit was about 7 per cent higher than that of the preceding quarter ended September 30 2011. Hartalega attributed the increase to stronger sales and a reduction in foreign exchange net loss of RM6.41 million.

The net loss in foreign exchange was RM202,000 for the quarter under review compared with RM6.61 million in the preceding quarter.

Nevertheless, Hartalega remains optimistic about the remaining financial year and will continue to implement its expansion plan to reduce lead times to meet demand as well as capitalise on the expected increase in demand.

"We have further expanded our Plant 5 with two more new advanced high-capacity glove production lines. Both lines have started operations this month.

"We also have commenced the construction of Plant 6 with 10 new advanced high-capacity glove production lines and target to start operating the first line in September 2012.

"The board (of Hartalega) is optimistic that the group will achieve the internal target growth for both sales revenue and net profit for the financial year ending 31 March 2012," the company said.

On Bursa Malaysia yesterday, Hartalega shares closed 1.5 per cent, or 12 sen higher, at RM7.97.