KUALA LUMPUR (June 24): Wholesale, retail and multi-level marketing (MLM) company Hai-O Enterprise Bhd’s net profit for its fourth quarter ended April 30, 2015 (4QFY15) fell 10.8% to RM9.39 million or 4.8 sen per share, from RM10.52 million or 5.35 sen per share in 4QFY14, mainly due to the lower profit margin in its wholesale division.

Revenue for 4QFY15, however, rose 14.5% to RM70.44 million, from RM61.5 million in the same quarter last year, mainly due to higher revenue achieved for its wholesale and retail divisions, with the latter driven by its pre-goods and services tax sales campaign, its filing to Bursa Malaysia today showed.

The company proposed a dividend of 11 sen per share in respect of its financial year ended April 30, 2015 (FY15) — subject to approval of its shareholders at its forthcoming annual general meeting (AGM) — with the date of entitlement and payment of the dividend to be advised later.

For FY15, Hai-O recorded a 25.3% decrease in net profit to RM30.09 million or 15.39sen per share, from RM40.27 million or 20.46 sen per share a year ago, again due to the lower profit margin from its wholesale division.

Revenue for FY15 also decreased by 5.3% to RM239.91 million, from RM253.42 million, mainly due to lower revenue generated by its MLM division.

Hai-O's (fundamental: 3; valuation: 1.8) shares closed down 3 sen or 1.33% today to RM2.23, resulting in a market capitalisation of RM434.56 million.
 
The group anticipates the next financial year to remain challenging, in view of weakening domestic purchasing power and high costs of living, which resulted in consumers being more cautious in their spending.  

"Furthermore, the weakening ringgit against the US dollar will increase the cost of import purchase," said Hai-O.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)