KUALA LUMPUR – Hartalega Holdings Bhd recorded a net loss of RM218.04 million in the financial year ending on March 31, 2023 (FY23), compared with a net profit of RM3.23 billion registered in FY22.
Its revenue for the year under review fell to RM2.4 billion from RM7.89 billion chalked up a year ago, amid the current headwinds and the oversupply situation in the glove sector, Hartalega said in a filing with Bursa Malaysia today.
In a separate statement, the group said the prevailing tough market conditions in FY23 continued to take a toll on its bottom line.
Nonetheless, chief executive officer Kuan Mun Leong said the company is privileged to have more than three decades of experience to be able to weather the current storm and future challenges that would 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. As such, we have embarked on a five-year strategic plan to ensure the long-term business sustainability of the group,” he said.
Kuan said the strategic plan entails operational rationalisation with decommissioning the group’s Bestari Jaya facility to enhance efficiencies and optimise costs.
Yesterday, the group announced its plan to decommission four production plants in Bestari Jaya as part of its ongoing operational rationalisation exercise.
“Management has reviewed the carrying amount of its property, plant and equipment, capital work-in-progress and intangible assets and has recognised an impairment loss of RM 347 million in the FY23.
“The group is expected to recognise further provision for retrenchment cost and contract obligation expenses of approximately RM70 million in FY24,” the group said.
Kuan said while capacity rationalisation within the sector is expected to continue, the hurdles facing the sector are likely to persist in the short to medium-term.
“In addition to the market imbalance, glove manufacturers are also contending with a higher operating cost environment, with heightened pressure on operating margins,” he added.
The group’s performance was also impacted by lower average selling price and sales volume due to the global oversupply situation and ongoing supply chain inventory adjustments, reduced production utilisation and higher operating costs such as energy and labour costs. – Bernama, May 9, 2023
