The sharp decline in financial performance has been attributed to the effects of higher energy and labour costs due to the increase in natural gas tariffs and minimum wage implementation.

Revenue fell by 78.3% to RM845.67 million compared with RM3.9 billion previously, the glove producer said in a filing with Bursa Malaysia today.

“The lower revenue was mainly due to the normalising of the average selling price (ASP) and a decrease in sales volume by 28%, compared with the previous corresponding quarter when both the ASP and sales demand hit a record high during the pandemic period,” Hartalega said.

In a separate statement, CEO Kuan Mun Leong commented that the continued normalisation of ASP and demand was reflected in the company’s Q1 results, which also felt the brunt of higher operating cost 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,” he said.

In the short term, Kuan said, external headwinds are expected to persist due to higher commodity and raw material prices caused by disruptions to the global supply chain.

Nevertheless, the group remains focused on strengthening its long-term prospects.

“Towards this end, we will continue to progress with our latest expansion of the glove manufacturing facilities. This will be completed in phases, taking into account the prevailing market supply and demand conditions,” Kuan said.

“In the long run, the facilities will enable us to cater to growing structural demand for gloves globally, particularly due to increasing glove usage in emerging markets with a low glove consumption base, as well as higher hygiene awareness among healthcare practitioners in the post-pandemic era,” he added.