Quarterly revenue tumbled 47.97% to RM440.04 million versus RM845.67 million on lower sales volume and average selling price (ASP) as the industry continued to face an oversupply situation and supply chain inventory adjustment.

Loss per share was 1.54 sen compared to earnings per share of 2.58 sen previously. The company did not declare any dividend for the quarter.

“Strong headwinds in the glove sector are expected to continue as the global oversupply situation persists.

“Aggressive capacity expansion by regional players, coupled with excessive inventory build-up during the pandemic, has led to the current market supply-demand imbalance and industry-wide suboptimal operating level,” the group said in a filing with Bursa Malaysia today.

The company said the domestic glove industry had earlier contended with increased operating costs, such as higher energy and labour costs.

As a result, glove manufacturers are impacted by operating margin compression as the ASP price for rubber gloves remains competitive amid minimal success with the incremental costs pass-through, said Hartalega.

“Although capacity rationalisation is expected to continue, the challenging landscape is likely to persist for the time being. To ensure business sustainability and resilience over the longer term, the group has embarked on a five-year strategic plan.

The ongoing rationalisation exercise involves the decommissioning of its Bestari Jaya facility with the objective of consolidating its operations at the integrated glove manufacturing complex in Sepang, it added.

Hartalega said the decommissioning of the Bestari Jaya plant, which comprises four production plants, has commenced and is targeted to be completed by the first quarter of 2024.

Upon completion, the group expects to see improvement in operational and cost efficiencies, thus enhancing the group’s overall competitiveness moving forward.

Hartalega shares closed 5 sen or 2.3% lower at RM2.09, valuing the group at RM7.16 billion.