Hartalega Posts 119% Jump In Profit

Caught this article on Star Business: Hartalega posts 119% jump in profit

Naturally this stirred my interest.

This is what Star reported.

• HARTALEGA Holdings Bhd’s net profit surged 119.5% to RM22.23mil for the third quarter ended Dec 31 2008 from RM10.13mil in previous corresponding period.
  
  In a statement to Bursa Malaysia yesterday, the rubber glove maker says the higher profit was due to improvements in the production process and favourable exchange rates as well as contribution from its new, advanced glove production lines, which have a higher capacity.
  
  Revenue jumped 65.4% to RM119.06mil from RM72mil previously, while earnings per share (EPS) soared 119.4% to 9.17sen from 4.18sen.
  
  The company says it has a positive outlook for the year thanks to the lower natural and synthetic latex price and favourable exchange rates.
  
  “We expect the strong demand to continue into the (fourth quarter) despite the economic downturn,” it says.
  
  The group says it is optimistic of achieving its forecast net profit of RM55.46mil for the financial year ending March 31, 2009.

Am I impressed?

No, I am not too impressed.

I do have my reasons and here are my flawed reasoning.

Comparison made with the previous corresponding period last year is rather meaningless for me because Hartalega was only listed back in April 2008. So I am hardly impressed with Star Business's header for this news article.

Last quarter, Hartalega announced a net earnings of 18.3 million. See: Quarterly rpt on consolidated results for the financial period ended 30/9/2008. So this would equate to an improvement of around 21%. Which is fairly impressive but it pales in comparison to what the news article is suggesting.

Obviously many would argue against q-q comparisons and given the fact that Hartalega was only listed last April, I for one, feel that it's way too early to pass judgement on Hartalega's earnings performances.

Balance sheet looks rather slightly below average too for me.