Hartalega (5168) Q1 2026 earnings summary

Executive summary

• Q1 FY2026 revenue declined to RM553 million, down 9.6% sequentially and 5.3% year-over-year, due to lower sales volume, reduced average selling prices, and intensified competition, especially from China and U.S. tariff issues.

• Operating profit dropped to RM8 million, a 20% decline from the previous quarter and over 77% lower year-over-year, mainly from lower ASP, stronger Ringgit, and lower capacity utilization.

• Profit after tax was RM12 million, down 20% sequentially and over 61% year-over-year.

• Despite profitability compression, a robust net cash position of RM1 billion was maintained at end-June 2025.

• Profit before tax was RM14.3 million, aided by asset disposals but still down 65.2% year-over-year.

Financial highlights

• Revenue for Q1 FY2026 was RM553 million, down 9.6% sequentially and 5.3% year-over-year.

• Operating profit dropped to RM8 million, a 20% decline from the previous quarter and 77.1% lower year-over-year.

• EBITDA for the quarter was RM55 million, with a margin of 9.9%, down from RM59 million sequentially.

• Net profit for the quarter was RM12.3 million, a 61.3% decrease year-over-year.

• Earnings per share stood at 0.37 sen, down from 0.94 sen in the same quarter last year.

Outlook and guidance

• Glove sector recovery is on track, with global demand expected to increase in 2H CY2025 as healthcare consumption recovers.

• Long-term glove demand projected to grow at a 7%-9% CAGR post-normalisation.

• Management anticipates a gradual recovery in restocking and demand, but expects continued challenges from overcapacity, rising costs, and competition, especially from Chinese and Southeast Asian manufacturers.

• U.S. tariff uncertainties and redirected Chinese supply to non-U.S. markets are expected to keep ASPs under pressure.

• Market recovery faces hurdles from global oversupply, price sensitivity, and ongoing US-China tariff uncertainties.