PETALING JAYA: Hai-O Enterprise Bhd (Hai-O) is expecting financial year ending April 30,2020 (FY2020) to be challenging on the back of a high cost of living that is hampering consumers’ spending in Malaysia.
In its annual report 2019, the group managing director Tan Keng Kang said the group’s export-oriented sectors would also be affected by the US-China trade spat that has intensified by the slowing global economic activity.
“Even though the group does not expect an immediate uplift in the business environment, we believe our solid financial strength and the good growth enablers that we have put in place will stand us in good stead, ” he added.
Over the last one year, Hai-O share price has slid 44.1% to RM2.33 per share as of last Friday from RM4.16 per share a year ago.
In general, the market expected the group’s earning for FY2020 to come in marginally lower about 3%.
Recall, Hai-O posted a weaker set of results for its FY19, with the group’s net profit falling 34.4% to RM47.40mil from RM72.25mil a year ago due to lower sales across all of its three major divisions including multi-level marketing (MLM), retail and wholesale.
The results were also affected by the change in tax regime from Goods and Services Tax to Sales and Service Tax with MLM division being hit was hardest as purchase decisions were deferred amid the transitional uncertainties. Meanwhile, Hai-O revenue fell 28.9% to RM328.35mil for FY19 compared with RM461.69mil a year ago.
Despite the subdued earnings performance for FY19, the group’s balance sheet remained strong due to its good working capital management with the equity attributable to owners of the company at RM310.2mil as at end-FY19 from RM301.9mil a year ago.
Moving forward, the group is scheduled to announce its first-quarter ended July 31, by end of next month.
For Hai-O to deliver a profitable financial year, its group executive chairman noted that the group would continue to build on measures to expand and adapt products pipeline to cater for the market demand as well as strengthen its operational capability involving the upgrading of skills of distributors and employees. “To manage the prevailing uncertainties, the Hai-O group will leverage on technology to achieve cost optimisation.
“Our digital transformation journey will continue to be our key strategic initiatives moving forward allowing the group to provide better service to our MLM members who are in excess of 120,000 people as well as our 136,000 Hai-O Friendship members in retail segment, ” he said.
We're sorry, this article is unavailable at the moment. If you wish to read this article, kindly contact our Customer Service team at 1-300-88-7827. Thank you for your patience - we're bringing you a new and improved experience soon!
What do you think of this article?