Hartalega (5168) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue rose 33% year-over-year to RM584 million, driven by a 37% increase in sales volume and a marginal rise in average selling prices, despite shipment delays.

• Operating profit rebounded to RM35 million from a loss, and net profit reached RM32 million, marking a turnaround from a net loss of RM51.2 million in Q1 FY2024.

• EBITDA rose 48% to RM76 million with a 13% margin, and net cash position remained strong at RM1.3 billion.

• Profit before tax was RM41.1 million, compared to a loss before tax of RM44.7 million in the prior year, with Q1 FY2024 impacted by a one-off RM47 million severance provision.

• Earnings per share improved to 0.94 sen from a loss per share of 1.54 sen in Q1 FY2024.

Financial highlights

• Revenue grew 10% sequentially and 33% year-over-year; sales volume increased 5% QoQ and 37% YoY.

• Operating margin recovered to 6.0% from -2.3% in the previous quarter; PAT margin improved to 5.5%.

• Cash and cash equivalents at quarter-end were RM1.39 billion, down from RM1.43 billion at the start of the period.

• Net assets per share increased to RM1.37 from RM1.36 at the end of March 2024.

• Higher ASP by 4% contributed to improved financials despite higher input costs.

Outlook and guidance

• Global glove demand is recovering as pandemic stockpiles deplete, with restocking expected to continue into 1H CY2025.

• Market equilibrium is improving due to capacity rationalisation and exit of newer entrants, alleviating oversupply.

• Persistent global oversupply and shipping constraints are expected to continue pressuring average selling prices and causing shipment delays.

• Long-term prospects remain positive, supported by essential healthcare demand and rising hygiene awareness, especially in emerging markets.

• Focus remains on cost management, operational efficiency, automation, and advancing ESG initiatives.