KUALA LUMPUR (March 29): Higher sales pushed up multi-level marketer Hai-O Enterprise Bhd’s net profit by 57% to RM15.36 million in the third quarter ended Jan 31, 2017 (3QFY17) from RM9.78 million a year ago.
Quarterly revenue climbed 33% to RM107.18 million from RM80.52 million previously, thanks to higher turnover recorded at its multi-level marketing (MLM) and retail divisions, its stock exchange filing today showed.
In its MLM division, Hai-O said small-ticket consumer products such as food and beverage, personal care, skincare and household products — which have higher recurring sales — had contributed over 70% to the division's sales in 3QFY17.
More new members recruited — which rose to a monthly average of 6,000 — coupled with the substantial increase in renewed members, it said, had contributed to the increase in revenue and profit for the division.
As for its retail division, Hai-O said its effective advertising and promotion campaign during the Chinese New Year, together with support from customers’ loyalty programme, had increased the division's revenue by 13%, despite an overall weak consumer sentiment.
As for its wholesale division, Hai-O said though sales from the duty-free market had fallen 9%, pre-tax profit improved by 69% to RM2.5 million, on higher contribution from inter-segment sales.
Cumulatively, Hai-O's net profit for the nine months ended Jan 31, 2017 soared 63% to RM41.01 million from RM25.16 million a year ago, supported by a 36% growth in revenue to RM285.62 million from RM209.48 million.
Going forward, Hai-O said it is concerned about rising inflationary pressure and the prolonged weak ringgit against the greenback, as well as the weak consumer purchasing power.
However, with measures taken like innovative advertising and promotion programmes, its directors remain optimistic of a profitable 4QFY17.
Hai-O shares closed two sen or 0.6% down at RM3.30 today, giving it a market capitalisation of RM1 billion.