Founded in 1988, Hartalega is primarily an original equipment manufacturer (OEM) of gloves, exporting its products to distributors, importers, and brand owners in over 70 countries. In FY2024, North America and Europe accounted for 48% and 22% of Hartalega’s sales, respectively.
After reaching unprecedented financial and share price peaks during the pandemic, glove companies like Hartalega have been facing challenges due to a prolonged oversupply in the glove market. When will the situation normalize? Here are 10 key takeaways from the 2024 Hartalega AGM.
1. Revenue dropped 23.7% year-on-year to RM1.8 billion in FY2024 because of lower sales volume and average selling prices of gloves. As a result, operating margins were still compressed.
Despite rising operating costs amid the inflationary environment, the company recorded a net profit of RM12.5 million in FY2024 compared to a net loss of RM235.1 million in FY2023. It was affected by a one-off impairment amounting to RM347 million in FY2o23 as it decommissioned its Bestari Jaya facility. The company is looking to dispose of its Bestari Jaya facilities that currently incur minimal operating costs including security and maintenance expenses at RM1 million per month.
The glove maker distributed 0.35 sen dividend per share in FY2024 and continues to uphold its 60% dividend payout policy.
Source: Hartalega Q1 FY2025 results
2. Global glove demand in 2023 remained below 2019 levels due to excess supply, reduced demand, and intense regional and domestic competition. The market has taken years to absorb the surplus stock. Malaysian glove manufacturers have also been losing market share to Chinese competitors, who can offer lower prices, largely because of their lower energy costs.
Source: Hartalega 2024 AGM presentation slides
The silver lining is that domestic manufacturers have rationalised their capacity while smaller players have left the industry. This has helped to mitigate the
