HLT Global Berhad Q1 2025: Navigating Headwinds in a Challenging Market

HLT Global Berhad, a familiar name in Malaysia’s industrial and healthcare sectors, recently released its unaudited financial results for the First Quarter ended 31 March 2025. This report offers a glimpse into the company’s performance amidst a dynamic global economic landscape, revealing a period marked by significant revenue contraction but also strategic adjustments and a narrowing of losses compared to the immediate preceding quarter.

While the company faced a challenging quarter with a notable decline in top-line performance and increased gross and pre-tax losses compared to the same period last year, there are underlying shifts and strategic moves that warrant a closer look. Let’s dive into the numbers and what they tell us about HLT Global’s current standing and future trajectory.

Q1 2025 Performance: A Deeper Dive into the Numbers

The first quarter of 2025 presented a mixed bag for HLT Global, with overall revenue seeing a significant dip compared to the previous year’s corresponding quarter. This was primarily driven by a slowdown in its core glove-dipping lines segment.

Overall Financial Snapshot (Q1 2025 vs. Q1 2024)

As evident from the figures, HLT Global’s revenue contracted by 51.27% to RM6.849 million, primarily due to fewer ongoing projects in the glove-dipping lines segment. This reduction in top-line directly impacted profitability, leading to a 143.53% increase in gross loss and a 69.76% rise in pre-tax losses compared to Q1 2024. The loss after taxation also widened by 43.41% to RM3.677 million.

Segmental Performance Analysis

HLT Global operates primarily through two key segments: Glove-Dipping Lines and Rubber Gloves. Their individual performances paint a clearer picture of the overall results:

Glove-Dipping Lines Segment

This segment saw a sharp decline in revenue by 81.72%, reflecting a reduced number of new projects and a slowdown in demand for new production lines. Despite this, the segment managed to improve its gross profit margin significantly to 32.06% (from 16.02% in Q1 2024), attributed to a favorable mix of higher-margin project work and better cost control. However, the lower revenue base led to a substantial 98.47% drop in profit before taxation for the segment.

Rubber Gloves Segment

The rubber gloves segment showed a relatively stable revenue, with a slight 0.58% increase to RM5.230 million. Export markets, particularly the United States, Japan, China, Taiwan, and Denmark, continued to be key contributors. However, this segment experienced an increased gross loss of RM2.796 million, translating to a gross loss margin of 53.46% (up from 45.27% in Q1 2024). This was primarily due to persistent pressure on average selling prices (ASP) from global oversupply and higher input costs such as raw materials, energy, and labor.

Comparison with Immediate Preceding Quarter (Q1 2025 vs. Q4 2024)

On a quarter-on-quarter basis, HLT Global’s performance showed signs of improvement. Revenue increased by 27.33%, mainly driven by higher sales from the rubber gloves segment due to a resurgence in export demand. More notably, the loss before taxation narrowed significantly by 74.93%. This substantial improvement was largely due to the absence of one-off impairment provisions and write-downs that had materially affected the preceding quarter’s performance, including impairments on property, plant and equipment, inventory write-downs, and impairment losses on trade and other receivables.

Financial Health: Balance Sheet and Cash Flow

As of 31 March 2025, HLT Global’s total assets stood at RM147.172 million, a slight increase from RM144.917 million at the end of 2024. Total liabilities also increased to RM75.519 million from RM69.587 million, mainly due to an increase in trade payables and contract liabilities. Net assets per share remained stable at RM0.09.

Cash flow from operations remained negative, with net cash used in operating activities increasing to RM(4.316) million from RM(1.842) million in the same period last year. This led to a net decrease in cash and cash equivalents of RM(4.731) million for the quarter, leaving the company with RM3.669 million in cash and cash equivalents at the end of Q1 2025, a significant drop from RM28.317 million a year ago. However, it’s worth noting the reversal of impairment loss on trade receivables, reflecting improved collections and credit risk management.

Risks, Prospects, and Strategic Outlook

Looking ahead, HLT Global acknowledges the complexities of the current market environment but remains cautiously optimistic about the long-term prospects of the rubber glove industry. The report highlights several factors influencing the company’s outlook:

Industry Prospects

The rubber glove industry is poised for a strong demand recovery in 2025. This positive outlook is underpinned by:

• Increased global demand for personal protective equipment (PPE).
• Rising health and hygiene awareness worldwide.
• Potential shifts in global market share, particularly due to recently announced U.S. tariffs on Chinese-made medical gloves.
• Sustained post-pandemic growth in global glove demand.
• Expansion of the healthcare sector and increasingly stringent food industry regulations, driving consistent demand for single-use protective items.

Challenges and Risks

Despite the positive demand outlook, HLT Global identifies several ongoing challenges:

• Fluctuating raw material costs.
• Potential predatory pricing practices from competitors.
• Geopolitical uncertainties that could impact global trade and supply chains.
• Continued industry overcapacity and pricing pressure, particularly impacting the rubber gloves segment’s margins.

Strategic Initiatives

To navigate these challenges and capitalize on opportunities, HLT Global is focusing on:

• For the Glove-Dipping Lines segment: Actively securing additional foreign contracts and expanding its presence in international markets. One foreign project remains in progress.
• For the Rubber Gloves segment: Optimising operational efficiency, controlling costs, and improving productivity to mitigate the impact of pricing pressures and high input costs.

Corporate Developments

A significant corporate development is the proposed renounceable rights issue of up to 428,415,921 new ordinary shares, along with free detachable warrants. This proposal has received shareholder and regulatory approvals, with the issue price and exercise price fixed at RM0.06. This move is likely aimed at strengthening the company’s capital base and providing working capital for future growth.

Material Litigations

The company also disclosed several material litigations. One significant case involves HL Advance Technologies (M) Sdn. Bhd. (a subsidiary) seeking RM16.4 million from WRP Asia Pacific Sdn. Bhd. and others, which is currently under appeal. Another case involves HL Advance Technologies (M) Sdn. Bhd. claiming RM4.8 million from Encompass Industries Sdn Bhd, with the defendant filing a counterclaim for over RM50 million. Additionally, a supplier is claiming over RM0.9 million from HL Advance Technologies (M) Sdn. Bhd. These litigations represent potential financial and operational risks that warrant close monitoring.

What Are Your Thoughts?

HLT Global’s journey through 2025 appears to be one of adaptation and resilience. Do you think the company’s strategies to focus on operational efficiency and international expansion will be sufficient to turn the tide in the coming quarters? Share your insights and observations in the comments section below!

For more in-depth analysis on Malaysian companies and market trends, be sure to check out our other articles.