This marked the glovemaker’s first quarterly net profit after three consecutive quarters of net losses.

Revenue dropped 22.7% y-o-y to RM452 million, primarily due to lower sales volume and lower average selling price (ASP), according to the group’s Bursa Malaysia filing.

Despite the drop in revenue, Hartalega said it posted a higher profit before tax margin in Q2 FY2024 mainly due to foreign exchange gain and higher interest income.

For the six months ended Sept 30, 2023 (H1 FY2024), the group posted a net loss of RM24.8 million against a net profit of RM116.6 million in the corresponding period last year.

Revenue decreased 38% y-o-y to RM892 million from RM1.4 billion in H1 FY2023.

In its bourse filing today, Hartalega attributed the decline in earnings to a 27% lower sales volume as well as lower ASP, after offset with lower raw material and labour costs.

Headwinds remain

Moving forward, the group foresees several major headwinds to remain in the glove sector for the remainder of the financial year.

“As the market continues to adjust from global oversupply, pressure on ASP is likely to continue amid intense market competition,” the group’s filing read.

In response to the growing complexity of the business environment, Hartalega said it has initiated a five-year strategic plan aimed at enhancing long-term business sustainability and resilience.

The plan includes several operational rationalisation exercises including the decommissioning of the group’s Bestari Jaya facility and the consolidation of its manufacturing operations at the Next Generation Integrated Glove Manufacturing Complex in Sepang.

“Upon the decommissioning of the Bestari Jaya facility by the first quarter of calendar year 2024, the group expects to see improvement in operational and cost efficiencies,” the filing said.

At 4.22pm, Hartalega’s share price rose 15 sen or 7.01% to RM2.29, valuing the group at RM7.88 billion.