Hartalega : 2QFY23 Results Release

2nd Quarter FY2023 Financial Results

Hartalega Holdings Berhad Analyst Briefing

8 November 2022

Q2 FY2023 Financial Results Overview

	Q2 FY23	Q1 FY23	QoQ	Q2 FY22	YoY
	Change	Change
Sales Volume	5.1	7.3	(30%)	6.6	(22%)
('bil pieces)
Utilisation Rate	49%	69%		63%
Revenue	585	846	(31%)	2,011	(71%)
(RM'mil)
Operating	44	153	(71%)	1,181	(96%)
Profit (RM'mil)
OP Margin	7.5%	18.1%		58.7%
PBT (RM'mil)	37	134	(72%)	1,187	(97%)
PBT Margin	6.3%	15.8%		59.0%
PAT (RM'mil)	29	91	(68%)	914	(97%)
PAT Margin	5.0%	10.8%		45.4%

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Q2 FY2023 Financial Results Overview

Revenue (RM'mil)

846
	585
1Q'23	2Q'23

PBT (RM'mil)

134
	37
1Q'23	2Q'23

PAT (RM'mil)

91
	29
1Q'23	2Q'23

Factors affecting the quarter:

Revenue declined with lower sales volume recorded in the quarter amid strong market competition and lower customers' demand

Profit margin compression with higher overall operating costs following lower plant utilization rate while ASP level remained soft due to supply glut

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distributed or reproduced in whole or in part, nor passed to any third party without the prior written consent of Hartalega.

Strong headwinds for the sector

Market competition continues amid rising costs

Billion pcs

Estimated Industry Supply - Key Players

(Rubber gloves)

400

350

300				40	49
250
33	83	83
200
24
150
100	182	198	198
50
-
2020	2021	2022
			Malaysia		China		Thailand

Source: Company estimates, press releases & announcements

Continued strong market competition and excess capacities from major players capped

upward trajectory for ASP

Global inflationary pressure resulted in higher operating costs environment

• Higher energy costs

(increase in electricity & natural gas tariffs in 2022)

• Increased labour cost with new minimum wage

standard in Malaysia starting 1 May 2022

(RM1,200 → RM1,500)

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distributed or reproduced in whole or in part, nor passed to any third party without the prior written consent of Hartalega.

Impact of COVID-19 to global demand

Global Demand for Gloves (Billion pcs)

400
			367	384	65 bil
		66 bil
300
251	275	284
200					207
100					YTD 8M'22
2017	2018	2019	2020	2021

In 2020 and 2021, the world imported appx. 131 bil pcs more than normal consumption - panic

buying due to COVID-19 pandemic

The over-purchases will need to be depleted over time, which resulted in lower buyers' demand seen in 2022

	Source: International Trade Center (ITC), company estimates
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distributed or reproduced in whole or in part, nor passed to any third party without the prior written consent of Hartalega.