Hartalega (5168) AGM 2024 Presentation summary

Financial performance and recovery

• FY2024 saw weaker operating performance due to a 16% drop in sales volume and 9% lower average selling prices, but ended with a positive EBITDA of RM178 million and PBT of RM38 million.

• Profit after tax rebounded to RM20 million in FY2024 after losses in the previous year, with a proposed final dividend of 0.35 sen per share (total payout RM11.9 million).

• Net cash position remained strong at RM1.4 billion at end-FY2024.

• Recent quarters showed significant YoY and QoQ profit improvements, driven by higher sales volume, improved production efficiencies, and margin recovery.

Market outlook and industry trends

• Global glove demand weakened post-pandemic due to excess inventories but began recovering in early 2024 as restocking activities resumed.

• Global market size is forecasted at 306–318 billion pieces for 2024/2025, with long-term demand CAGR expected at 6–8%.

• Malaysia remains a leading exporter, with market share stabilizing as smaller players exit and capacity is streamlined.

• Market faces both headwinds (oversupply, competition, logistics, forex volatility) and tailwinds (demand recovery, quality preference, US-China trade tensions).

Strategic initiatives and operational changes

• Completed decommissioning of older facilities, reducing installed capacity from 44 to 32 billion pieces, and transferred 1,600 employees to the NGC site.

• Production ramp-up at NGC increased utilization to above 80%, with further scaling aligned to demand recovery.

• NGC1.5 expansion (Plants 8-9) will add 11 billion pieces capacity, targeting 37 billion by end-FY25, leveraging newer technology for efficiency.

• Strategic plan focuses on product innovation (COATS, Goodpac+), expanding into new markets, and transforming sales and marketing.