08 May 2012
Hartalega records full year revenue growth of 26.7% to RM 931 million but profit before tax margin drops from 34.4% to 26.8% due to increase in raw material prices of nitrile latex, fuel cost and more competitive sales pricing
(HARTA closing stock price today (8.5.2012) was RM 7.84)
Hartalega Holdings Berhad net profit for the fourth quarter ended March 31, 2012 fell 4.55% to RM50.01 million from RM52.39 million a year earlier, despite a 24.77% increase in revenue to RM240.22 million.
The company said on Tuesday that the significant increase in revenue was in line with the continuous expansion in production capacity and increase in demand.
However, its bottom line was impacted by the increase in raw material prices of nitrile latex, fuel cost and more competitive sales pricing for the current quarter compared with the corresponding quarter of the preceding year, it said.
Earnings per share was 13.73 sen compared with 14.42 sen a year earlier, while net assets per share was RM1.70.
The company declared a third interim dividend of six sen per share single tier for the financial year ended March 31, 2012 to be paid on June 13.
For the financial year ended March 31, Hartalega’s net profit was up 5.95% to RM201.62 million from RM190.29 million.
Hartalega said revenue for the year rose to RM931.08 million from RM734.92 million.
Reviewing its performance, Hartalega said the global demand for nitrile gloves continued to grow by 29% for the year 2011 due mainly to switching momentum from natural rubber gloves to nitrile gloves.
It said his had spurred a significant increase in nitrile gloves production capacity by the industry which it was confident would be more than matched by resilient demand dynamics.
‘Furthermore, we do not expect a price war from the second half of 2012, as claimed by certain quarters as global demand growth continues to outpace growth in industry capacity,” it said.
The company said that on the contrary, it had to put some of its customers on allocation for their April 2012 purchase and beyond despite adding two new production lines in plant 5 to meet escalating demand.
“Based on our experiences, there are no expectations for a price war in the foreseeable future.
“Rather, the continued expansion in global demand for nitrile rubber gloves would be satisfied by industry capacity increase. This would only generate healthy competition among competitive rubber glove manufacturers,” it said.
Hartalega said it had achieved the internal target growth for both sales revenue and net profit for the financial year ended 31 March 2012.
“The board of directors is optimistic that the Group will achieve continuous growth and securing better results for the next financial year,” it said.