Hai-O 4Q net profit rises 63%, plans 11 sen dividend

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KUALA LUMPUR (June 29): Hai-O Enterprise Bhd posted a 63% rise in earnings in its fourth quarter of financial year 2017 (4QFY17), as both its wholesale and multi-level marketing divisions performed better.

Net profit for the three months ended April 30 came in at RM18.25 million compared with RM11.18 million a year earlier, while revenue grew 34% to RM118.37 million from RM88.15 million, its Bursa Malaysia filing today showed.
The group proposed a final single tier dividend of 11 sen per share for FY17, which brings its total payout for the year to 16 sen, a sen higher than FY16.
The entitlement and payment dates will be advised later, Hai-O said.
The company said its MLM division registered a 48.4% rise in revenue to RM95.4 million and 57.5% rise in profit before tax (PBT) to RM19.5 million, thanks to higher sales from most of its products and additional sales from newly-launched ones. 

The quarter also recorded a 50% jump in new members under the division, Hai-O said, with its new focus on smaller consumer products and targeted recruitment strategy continuing to attract younger entrepreneurs to join the group as distributors.
Its wholesale division's external revenue was flat at RM12.7 million, but PBT more than doubled from RM1 million to RM2.3 million, on higher inter-segment sales to the MLM division, Hai-O said.
For FY17, its net profit rose 63% to RM59.26 million from RM36.34 million a year ago, with revenue up 36% to RM403.99 million from RM297.63 million .
Going forward, Hai-O said the group is of view that the next financial year will be another challenging one.
“The MLM division will continue to enhance and promote the use of digital marketing platform, which enables the division to solicit additional new members locally and regionally and [to] penetrate into other potential markets,” Hai-O said.
“Besides, the division is currently looking into [a] new range of fashion and lifestyle products to widen its product base, while planning to roll out more new consumer products, inclusive of personal care products, wider range of skin care products and leather goods in the next financial year,” the filing added.
Shares in Hai-O closed down one sen or 0.26% at RM3.90 today, for a market capitalisation of RM1.13 billion.

Over the past 12 months, Hai-O has surged 114.3% to RM3.90 today, from RM1.82.