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Hai-O to continue to be profitable
Jun 27, 2013
Source: The Edge Financial Daily
 

KUALA LUMPUR: Multi-level marketing (MLM) company Hai-O Enterprise Bhd posted a net profit of RM10.5 million, an 8% increase from last year's RM9.3 million for its fourth quarter ended April 30, 2013 (4QFY13), contributed by its three main divisions.

In a filing with Bursa Malaysia yesterday, the group also reported a higher revenue of RM72.1 million compared with RM69.6 million a year ago.

It said its three main divisions — MLM, wholesale and retail — had mainly contributed to the increase in revenue and profit.

Hai-O said profit in its MLM division rose 14% due to higher margin products sold. Profit at its wholesale division also increased by 16% due to higher contribution from inter-segment sales to its MLM division.

Its retail division saw a 25% increase in revenue as the Chinese New Year festive season fell in 4QFY13. However, there was no increment to profits due to higher operating costs incurred in the quarter.

Earnings per share were 5.1 sen compared with 4.69 sen the preceding corresponding quarter.

The group also proposed a dividend of 8 sen per share, bringing the total dividend for FY13 to 14 sen compared with 9 sen the year before.

For FY13, the group posted a net profit of RM47.4 million, a 39.5% increase from RM34 million a year ago. This was on the back of higher revenue of RM267.9 million compared with RM239.5 million recorded in FY12.

On its outlook, Hai-O said the company is optimistic that it will continue to be profitable as it has various plans for FY14, especially for its three main divisions.

Its MLM division will be embarking on new product developments, effective product training for distributors and growth of new membership, while its wholesale division has successfully secured the exclusive agency right on a few new branded Chinese medicated tonic to enhance its product mix.

"For [our] retail division, it has been operating in a very tough business environment, as running costs and rental expenses have escalated recently ... therefore we are taking this opportunity to relook its business strategies,” Hai-O added. — by Madiha Fuad