Hartalega 1Q results hit hard by headwinds
“The glove sector is faced with higher operating costs due to rising inflationary pressure resulting from the higher electricity and natural gas tariffs, coupled with the new minimum wage policy in Malaysia which came into effect on May 1, 2022," Hartalega said.usdt支付对接(www.trc20.vip）是使用TRC-20协议的usdt支付对接平台,Usdt收款平台、Usdt自动充提平台。免费提供入金通道、Usdt钱包支付接口、Usdt自动充值接口、Usdt寄售回收。菜宝Usdt钱包一键生成Usdt钱包、一键调用API接口、一键出售Usdt。
PETALING JAYA: Hartalega Holdings Bhd will continue to emphasise cost management, efficiency improvement and automation initiatives across its operations amid the challenging business landscape to ensure business sustainability and adaptability.
In a filing with Bursa Malaysia, the group said several headwinds were expected to remain due to the Russia-Ukraine conflict and lockdowns in China. These events had caused further strain on global supply chains that led to higher commodity and raw material prices.
“The glove sector is faced with higher operating costs due to rising inflationary pressure resulting from the higher electricity and natural gas tariffs, coupled with the new minimum wage policy in Malaysia which came into effect on May 1, 2022.
“In addition, the sector is also experiencing escalating market competition exacerbated by the continued oversupply situation in the global glove industry,” the group said in a statement.,
The group’s net profit for its first quarter ended June 30, 2022 fell 25 times to RM88.28mil while revenue slid five-fold year-on-year to RM845.67mil.
On a per share basis, Hartalega’s earnings dropped to 2.58 sen in the current quarter from 66.08 sen in the previous corresponding period.
The lower revenue was mainly due to the normalising of the average selling price (ASP) and a decrease in the sales volume by 28%, as compared to the previous quarter when both the ASP and sales demand hit a record high during the pandemic period.
In addition to the significant reduction in revenue, performance in the current quarter was affected by higher energy and labour costs due to the increase in natural gas tariffs and the minimum wage implementation.
Hartalega CEO Kuan Mun Leong said as ASP and demand continued to normalise, as reflected in the current quarter’s results, the company”s financial performance was further impacted by the higher operating cost environment amid rising inflationary pressure resulting from the higher electricity and natural gas tariffs, as well as the new minimum wage policy implemented in May 2022.
“In addition, heightened market competition was further intensified by the ongoing oversupply situation in the global glove sector. In the short term, external headwinds are expected to persist.