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Wednesday, September 21, 2016

Hai-O's 1Q net profit jumps 46.9% on contributions from various divisions

Hai-O's 1Q net profit jumps 46.9% on contributions from various divisions
By Gho Chee Yuan / | September 21, 2016 : 7:06 PM MYT

KUALA LUMPUR (Sept 21): Hai-O Enterprise Bhd's first quarter net profit rose 46.9% to RM9.74 million or 5.03 sen per share, from RM6.63 million or 3.39 sen per share a year earlier, mainly contributed by its multi-level marketing and wholesale divisions.

Revenue for the quarter ended July 31, 2016 (1QFY17) strengthened 42% to RM78.66 million from RM55.38 million, the group said in a filing to Bursa Malaysia today.

No interim dividend has been declared for the quarter.

Moving forward, Hai-O said consumers will continue to stay cautious in their spending amid the prolonged weak economy and uncertainties around the region.

"This will affect the domestic market sentiment," said the Chinese and Western wines and herbs retailer.

In view of this, the group said it has taken several measures proactively in managing its business to ensure sustainability.

On its multi-level marketing division, Hai-O said it will continue to emphasize new products development strategy, intensify new member recruitment programme as well as members' retention programme.

"The division will launch its first incentive trip campaign in the next quarter for the current financial year which will help to boost the sales further," it added.

As for its wholesale and retail divisions, Hai-O said both segments are still operating in an unfavourable business environment, with consumers still mindful of their spending.

"The two divisions have continued to work on promoting healthcare products for young consumer markets and will roll out few effective marketing campaigns to increase more brand awareness on its products," it said.

It added the wholesale division will continue to explore new agencies with its principals to widen its products distribution base.

Given all these, Hai-O remained optimistic that it will continue to be profitable in the next quarter.

Hai-O's share price shed seven sen or 2.01% to close at RM3.41 today, valuing the company at RM658.19 million.

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