Hartalega 4Q net profit up 12.9% to RM52.39m

HARTALEGA HOLDINGS BHD [ ] net profit for the fourth quarter ended March 31, 2011 rose 12.9% to RM52.39 million from RM46.41 million a year earlier, driven by continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes.
Revenue for the quarter was up 17.8% to RM192.52 million from RM163.39 million. Earnings per share was 14.41 sen while net assets per share was RM1.36.
The company declared a third interim dividend of 6 sen per share single tier in respect of the financial year ending March 31, 2011 and payable on June 10.
For the financial year ended March 31, Hartalega’s net profit rose 33% to RM190.16 million from RM142.91 million, on the back of a 28.5% increase in revenue to RM734.92 million from RM571.89 million.
Reviewing its performance, Hartalega said on Tuesday, May 10 that the increase in profit was due to the contribution from its plant 5’s more efficient production lines and higher capacity to generate increased sales.
On its prospects, Hartalega said glove consumption was inelastic in the medical environment due to mandatory usage for disease control, adding that its nitrile synthetic glove was well accepted by the end users due to its high quality and elastic PROPERTIES [ ] that mimic that of a natural rubber glove.
The switching from natural rubber to nitrile glove had gathered momentum in Europe and demand was growing rapidly, it said.
“We expect the nitrile glove demand will continue to grow by 30% for calendar year 2011 and our group is well positioned to take advantage of such demand growth with the completion of our plant 5 production lines which has started to contribute toward increasing our output capacity,” it said.
Correspondingly more producers are switching their production facilities to produce Nitrile glove and there could be some overcrowding of nitrile gloves producers, it said.
With the sharp increase in nitrile material price and a weaker US dollar, challenging time was ahead, it cautioned.
“Our group is well positioned with the competitive advantage, leveraging on our technological competency, we will be able to deal with the competitive environment and limiting the impact on our margin and absolute profit,” it said.
Hartalega said it had achieved the internal target growth of net profit for the financial year ended March 31, 2011, adding it was optimistic of achieving continuous growth and securing better results for the next financial y