KUALA LUMPUR: Hartalega Holdings Bhd
CEO Kuan Mun Leong declared the group's commitment to "stay the course" while reiterating confidence that market demand and supply in the glove industry will reach an equilibrium in the long run.
He made these remarks as the glove maker announced that it had incurred a wider net loss of RM302.76mil in the fourth quarter of its 2023 financial year, representing a loss per share of 8.86 sen.
In comparison, the group's net loss in the same quarter in 2022 was RM198.15mil.
Tallying its results over the entire financial year, the group recorded a net loss of RM218.04mil, a sharp drop from a net profit of RM3.23bil in the year before.
According to Hartalega, the group recognised an impairment loss of RM347mil for the decommissioning of its Bestari Jaya plant, resulting in a full-year loss after tax of RM220mil for the 2023 financial year.
Excluding the impairment loss, the group achieved a full-year profit after tax of RM126mil.
On topline, the group reported a final-quarter revenue of RM515.74mil, bringing the full-year result to RM2.41bil.
In FY22, Hartalega's full-year revenue came to RM7.89bil.
The group's fortunes have continued to be weighed down by the lower average selling price and sales volume of gloves due to the global oversupply situation and ongoing supply chain inventory adjustments.
Compounding the earnings downturn, the group has also experienced reduced production utilisation and higher operating costs, such as energy and labour costs.
Kuan said Hartalega has embarked on a five-year strategic plan to ensure its long-term prospects.
"We are not going to sit idle while the entire glove sector faces enormous and unprecedented challenges.
"Hartalega is privileged to have more than three decades of experience to be able to weather the current storm and future challenges that will undoubtedly impact the sector.
"Heightened global competition in the glove manufacturing sector demands that we adapt and evolve our growth strategy to maintain our pole position," he said in a statement.
Kuan said forward-looking measures include prudent cost optimisation measures, strengthening operational efficiencies and automation upscaling.
He added that the growth strategy remains underpinned by the group's environmental, social and governance (ESG) agenda to maintain sustainable growth.
In an announcement yesterday, Hartalega said it would rationalise its operations by decommissioning its Bestari Jaya facility and consolidating operations at its Next Generation Integrated Glove Manufacturing Complex (NGC) in Sepang.
According to Kuan, the consolidation will improve the group's operational efficiencies and overall competitiveness moving forward.
"Leveraging the NGC’s advanced technologies and manufacturing processes, we will be well-positioned to cater to long-term demand growth when we pass through this difficult period,” he said.
