KUALA LUMPUR (Aug 6): Hartalega Holdings Bhd (KL: HARTA) posted a net profit of RM31.9 million or 0.94 sen per share for its first quarter ended June 30, 2024, a turnaround from the RM52.5 million loss recorded in the previous financial year’s corresponding quarter.

Profit before tax for the quarter under review rose to RM41 million from a loss of RM45 million.

Quarterly revenue increased by 33% to RM584 million from RM440 million recorded in the corresponding quarter last year.

It proposed a dividend of 0.35 sen per share during the period under review, subject to approval at its next shareholders meeting on Sept 6.

The group’s improved performance for the quarter was primarily due to a recovery in sales volume and increased average selling prices (ASP) during the period," said the group in a statement.

Profitability was further supported by lower operating costs driven by improved production efficiency with higher capacity utilisation, it added.

In the same statement, Kuan Mun Leong, CEO of Hartalega, said, "Amid persisting headwinds, we are encouraged by the gradual improvement in demand supported by strategic capacity rationalisation by key industry participants and depleting inventory stockpiles. In addition to this, our operational efficiency enhancement measures continue to yield positive results.”

Despite this turnaround, Kuan said the group was impacted by shipment delays amid ongoing global shipment constraints.

"The new normal in doing business is the fact that we have to be more prepared for the vagaries of these market uncertainties. Hence, all the more our 5-Year Strategic Plan keeps us grounded in terms of our areas of focus, which are optimising operational and cost efficiencies, increasing automation and maintaining our lead in social compliance and sustainability through our robust ESG initiatives," he said.

In anticipation of a more favourable demand environment, Kuan said it will continue to strategically ramp up its production capacity while being mindful of market dynamics.

"Despite ongoing external market pressures, we anticipate glove demand will continue its trajectory towards pre-pandemic levels and beyond, driven by growing global healthcare needs and hygiene awareness. Hartalega is well-positioned to capitalise on this upcoming market upturn," added Kuan.

Hartalega's shares gained 17 sen or 6.9% at RM2.65 at noon break, valuing the company at RM9.08 billion.