Hai-O’s 4Q net profit grows 24.4%, declares 11 sen dividend

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KUALA LUMPUR (June 29): Hai-O Enterprise Bhd’s net profit grew 24.4% to RM11.2 million in the fourth quarter financial year 2016 ended April 30, 2016 (4QFY16), from RM9 million in the previous corresponding quarter.

Quarterly revenue expanded by 25.8% to RM88.6 million, from RM70.4 million in 4QFY15.

The board of directors proposed a final single tier dividend of 11 sen per share, in respect of the financial year 2016 ended April 2016 (FY16).

In a filing of its results announcement to Bursa Malaysia today, the company attributed the improved earnings to higher revenue achieved by the multi-level marketing (MLM) division.

The MLM division recorded a growth of 46.5% in revenue to RM198.7 million, from RM135.6 million; and an increase of 26.7% in pre-tax profit to RM36.5 million, from RM28.8 million, as a result of higher sales volume on most of beverage and health supplements products, according to the announcement to Bursa Malaysia.

In addition, an average monthly newly-recruited members of about 3,000 to 4,000 persons, have also contributed to the division's additional sales. Despite lower unit selling price for the “small ticket” items, the recurring sales for “small ticket” items had contributed to the increase in sales and profit.

For the entire financial year of FY16, its annual net profit increased by 22.2% to RM36.4 million, from RM29.8 million in FY15; while its revenue for FY16 rose 24.3% to RM298.1 million, from RM239.9 million in FY15.

On its prospect, Hai-O expects the current financial year to remain challenging, due to continuous slowdown in the world economy that will negatively affect the domestic economy.

“The board of directors remains cautiously optimistic that the group will continue to be profitable in the next financial year,” the group added.

Hai-O was unchanged at RM2.73 today, with only 58,000 shares traded.