Hai-O net profit for third quarter increases to RM19.25mil

PETALING JAYA: Hai-O Enterprise Bhd’s net profit rose by 25.33% to RM19.25mil in its third quarter ended Jan 31, 2018 from the same quarter a year ago.

Quarterly revenue dropped slightly to RM103.07mil from RM107.18mil a year ago.

The company said that profits were lifted by the exceptional performance of its wholesale division that boosted its pretax profit by 15.3% to RM25mil.

Its basic earnings per share rose to 6.64 sen from 5.29 sen.

Hai-O’s board of directors also declared a second single tier interim dividend of 3 sen per share.

Commenting on its multilevel marketing division, the company said that the third quarter was its quiet months after the completion of the overseas incentive trip promotion campaign and 25th year anniversary grand sales promotion in the second quarter.

The company said that pretax profit for this division was reduced by 15.2% to RM14.5mil mainly due to lower revenue recorded and higher marketing costs incurred for its 25th year anniversary grand sales promotion.

Its wholesale division recorded external sales increased by RM2.9mil or 20.1% to RM17.1mil as compared to the preceding year’s corresponding quarter of RM14.2mil, the company said.

“The increase in revenue was mainly contributed by higher sales generated from Chinese medicated tonic and Chinese tea. The pretax profit increased by more than double to RM8.9mil mainly generated from premium Chinese medicate tonic and sales of vintage Puer tea,” it said.

“Furthermore, gain from resale of treasury sales amounting to approximately RM2.0mil and higher contribution from inter-segment sales had further contributed to the increase in the pretax profit,” Hai-O added.

For its retail division, the company said pre-Chinese New Year sales fell in the 4th quarter of this current financial year resulting in it recorded a revenue and pretax profit of RM9.3mil and RM0.1mil respectively.