Hartalega (5168) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 sales volume rose 48%-52% year-over-year to 6.8 billion pieces, driving a 44% YoY revenue increase to RM652 million, despite lower ASP in MYR terms.

• Operating profit turned negative at RM(27) million, with loss before tax of RM47 million, mainly due to adverse FX and higher costs from new production lines.

• Net profit after tax was RM9 million, supported by deferred tax assets from capital investment incentives, but down 69%-72% YoY.

• Maintained a strong net cash position of RM1.3 billion as of 30 Sep 2024, though down from RM1.43 billion at 31 Mar 2024.

• For 6M FY2025, revenue was RM1.24 billion (+38.5% YoY) with net profit of RM40.5 million versus a net loss in the prior period.

Financial highlights

• Utilisation rate improved to 90% post-decommissioning, up from 78% in Q1 FY2025.

• LBITDA of RM11 million due to FX impact; net FX losses of RM35 million weighed on profitability.

• Operating and depreciation costs increased with ramp-up of new production lines.

• Earnings per share for Q2 FY2025: 0.25 sen (Q2 FY2024: 0.81 sen); 6M FY2025: 1.19 sen (6M FY2024: -0.72 sen).

• Cash and cash equivalents at 30 Sep 2024: RM1.3 billion.

Outlook and guidance

• Market recovery expected to continue into CY2025 as pandemic stockpiles deplete and restocking begins.

• Long-term global glove demand projected to grow at a 6%-8% CAGR.

• Ongoing capacity streamlining and exit of newer entrants are alleviating oversupply pressures.

• US tariffs on Chinese gloves effective Jan 2025 may benefit Malaysian exports.

• Group will continue ramping up advanced production lines and focus on operational efficiency, automation, and ESG initiatives.