Professional Documents
Culture Documents
TABLE OF CONTENTS
CONTENTS
PAGE
1.0 INTRODUCTION
2.0 COMPANYS BACKGROUND AND STRATEGIES
2.1 ECONOMIC LANDSCAPE
2.2 DIVIDENDS
2.3 OPERATIONS REVIEW
2.4 ENVIRONMENTAL PERFORMANCE
2.5 MARKETING
2.6 HUMAN CAPITAL
2.7 OUTLOOK
2.8 ACKNOWLEDGEMENT
3.0 RATIO ANALYSIS
3.1 CURRENT RATIO
3.2 RATIO OF FIXED- ASSETS TO LONG-TERM
LIABILITIES
3.3 RATIO OF NET SALES TO ASSETS
3.4 RATE EARNED ON TOTAL ASSETS
3.5 RATE EARNED ON STOCKHOLDERS EQUITY
3.6 EARNINGS PER SHARE ON COMMON STOCK
4.0 DISCUSSION
4.1 CURRENT RATIO
4.2 RATIO OF FIXED-ASSETS TO LONG-TERM
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LIABILITIES
4.3 RATIO OF NET SALES TO ASSETS
4.4 RATE EARNED ON TOTAL ASSETS
4.5 RATE EARNED ON STOCKHOLDERS EQUITY
4.6 EARNINGS PER SHARE ON COMMON STOCK
5.0 CONCLUSION
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1.0
INTRODUCTION
2.0
ECONOMIC LANDSCAPE
Global economic growth was moderate in 2014. Although the
US was on the road to recovery, the European Union was still
gripped by the effects of the financial crisis, while emerging
markets, including Asian economies, saw subdued growth.
Malaysias glove manufacturing sector bore the brunt of
external market factors which affected all industry players.
This included softening raw material costs due to global
rubber supply surplus, which drove down average selling
prices, as well as higher operating costs due to increased
electricity and gas tariffs. Despite the tough economic climate,
global demand for rubber gloves saw robust growth during the
year. Demand growth was consistent in both developed and
emerging markets, buoyed by increasing healthcare standards
as well as healthcare reforms, particularly in developing
countries. Malaysia commanded approximately 62% of the
global export market in 2014, with total exports of rubber
gloves expanding 8.6% year-on-year to 48.9 billion pairs.
Nitrile rubber gloves took the lead once again, amounting to
51% of Malaysias total rubber glove exports. Exports of
synthetic rubber gloves rose by 9.7% to 24.9 billion pairs in
2014 compared with 22.7 billion pairs in the previous year,
and increased by 7.2% in value terms. In comparison, total
exports of natural rubber gloveshad a growth rate of 7.4% in
quantity terms and a 1.5% decline in value terms.
The US was the chief export region for Malaysian nitrile rubber
gloves, commanding over 30% of exports. The southern
regions of Europe and other emerging markets including China
and Brazil also registered growth in exports of nitrile rubber
gloves. Clearly, the industry is ripe with potential, and
Hartalega
earnings
before
interest,
tax,
DIVIDENDS
OPERATIONS REVIEW
Research and Development:Passion for innovation has always
complex
that
incorporates
the
most
advanced
due
to
Hartalega
superior
manufacturing
ENVIRONMENTAL PERFORMANCE
In tandem with Hartalega growth over the years, they have
always taken conscious steps to protect the environment in
the areas in which they have a presence. Towards this end,
they have implemented various sustainable measures with a
view towards actively preserving and safeguarding their ecosystem.
This
includes
their
biomass
and
waste
water
towards
establishing
MARKETING
sustainable
practices
standardise
operations,
building
an
even
stronger
HUMAN CAPITAL
The calibre of their human capital is integral to their success,
as their workforce is the backbone of the Group. As part of
their aim to enhance efficiencies across the board, they are
focused on creating a highly productive organisational culture
that incorporates lean management principles. As a result of
this, they were able to reduce their manual labour workforce
by 12% during the year. They are also actively engaged in
promoting
development
of skills
in
order
to scale
up
Leadership
management
addition,
they
team
have
to
Programme
enhance
for
core
implemented
the
the
Groups
competencies.
proven
In
Japanese
organisational
environment,
encourages
efficiency
teamwork
within
and
the
workplace
discipline,
and
2.7
OUTLOOK
Despite contending with challenging market forces during the
year, Hartalega was able to weather through this by
leveraging on our solid foundation, established track record
and strong margins. The inherent prospects of the glove
industry bode well for your Group over the long-term,
particularly given the resilient demand growth for nitrile
gloves. They are poised to capture this growth with the NGC,
which is proceeding on track. Once completed, the NGC will
comprise a total of six state-ofthe- art manufacturing plants
housing 72 technologically advanced production lines. This will
significantly expand their installed capacity to over 42 billion
per annum and increase productivity by 33% compared to
their existing facilities. As the first production lines of the NGC
were commissioned in the fourth quarter of the year under
review, this did not contribute substantially to profitability.
However, with new lines being commissioned progressively,
the significant boost in capacity will certainly have a positive
impact in the coming years ahead. The NGC also has an
improved
structured
maintenance
schedule
to
ensure
the
long-term
success
of
the
Group.
Talent
market
and
increasingly
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competitive
business
ACKNOWLEDGEMENT
Hartalega sincere appreciation to their Board members, as
well as their management team and employees, for their
steadfast dedication in guiding the Group forward. On a
personal note, Kuan Kam Hon @ Kwan Kam Onn would like
to thank Chuah Phaik Sim, who has decided to leave their
Board. Having been with they since their IPO, she has played a
vital role on the Board and her contributions have been
invaluable. On behalf of the Group, he would like to extend a
warm welcome to their newest Board member, Razman Hafidz
bin Abu Zarim, who was appointed as an Independent and
Non- Executive Director on 2 March 2015. Their gratitude also
goes
to
shareholders,
financiers,
business
partners,
3.0
RATIO ANALYSIS
3.1
CURRENT RATIO
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2016
388,443,301
126,983,875
3.06
539,060,2
70
190,654,1
02
2.85
The current ratio of Hartalega in 2015 is 3.06 but in 2016 is only 2.85.
This means that a company has a amount of time in order to raise the funds to
pay for these liabilities.
3.2
Fixed Assets(Net)
Long-Term Liabilities
2015
1,069,008,575
59,806,949
17.87
2016
1,422,039,
277
266,420,11
3
5.38
The Ratio of fixed- assets to long term in 2015 is 17.87 and its very different
in 2016 is only 5.38
3.3
14
2016
276,990,069
1,961,099,54
7
317,254,565
1,457,451,87
6
0.14
0.21
2016
209,498,202 + 108,544
1,457,451,876
0.14
258,259,393 +
376,585
1,961,099,
547
0.13
The total asset turnover ratio calculates net sales as a percentage of assets to
show how many sales are generated from each dollar of company assets.
In 2015 it is 0.14 but in 2016 is 0.13
3.5
Net
Income
Average Total Stockholder's
Equity
2015
2016
209,498,202
1,268,999,503
0.16
258,259,39
3
1,501,942,
273
0.17
2016
209498202-0
400,779,017
258,259,393-0
820,514,607
0.52
0.31
Earning per share on common stock in 2015 is 0.52 but in 2016 earning
decerease to 0.31.
Higher earnings per share is always better than a lower ratio because this
means shareholders.
The company is more profitable and the company has more profits to
distribute to its.
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4.0
DISCUSSION
4.1
CURRENT RATIO
Current ratio function in this case is used to indicate the ability to meet
currently mature obligations. In other words, its used to measure companys
ability to pay short-term and long-term obligations. From the analysis
provided, the current ratio shows a decrease trends from 3.06 in 2015 to 2.85
in 2016. In this case, it shows that Hartalega Bhd has a amount of time in
order to raise the funds to pay for its debt.
This current ratio helps investors and creditors understand the liquidity of a
company and how easily that Hartalega will be able to pay off its current
liabilities. They have RM 388,443,301 in 2015 and RM 539,060,270 in 2016
for their current assets. Their current liabilities in 2015 is RM 126,983,875 and
2016 is RM 190,654,102. To find working capital current assets must be
subtract with current liabilities. When subtracted, Hartalega Bhd working
capital is RM 261,459,426 for 2015 and RM 348,406,168 for 2016.
This ratio expresses a firm's current debt in terms of current assets. So a
current ratio of 4 would mean that the company has 4 times more current
assets than current liabilities. A higher current ratio is always more favorable
than a lower current ratio because it shows that Hartalega Bhd can more easily
make current debt payments.
If a company has to sell of fixed assets to pay for its current liabilities, this
usually means the company isn't making enough from operations to support
activities. In other words, the company is losing money. If a company is
weighted down with a current debt, its cash flow will suffer.
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4.2
4.3
4.4
almost always better than lower ratios, but have to be compared to other
companies' ratios in the industry. Since every industry has different levels of
investors and income, ROE can't be used to compare companies outside of
their industries very effectively.
Many investors also choose to calculate the return on equity at the beginning
of a period and the end of a period to see the change in return. This helps track
a company's progress and ability to maintain a positive earnings trend.
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4.6
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CONCLUSION
From our eveluation of the performance of Hartalega Holding Berhad, we has found
that this company show a good performance in year 2015 and 2016. The ratio analysis
also showed that this company perform very well and almost all ratio analysis is
positive. However compare to previous year that is 2015, the company performance is
decreasing in several aspects but still acceptable because the economic pressure is
very high in current year.
Last but not least, we suggest that company to take several defensive strategies to
make sure their performance is not effected too much with the enviromental pressure.
They should make sure they can survive and maintain their performance.
We think that Hartalega Holding Berhad has high potential business in Malaysia
however the economic may give negative effect and investor should hold their
investment as we think they can overcome the pressure and increase their
performance in the future.
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