Over 70% of the Hai-O's business is dealing in cash term, thus it is the main source for the Group's liquidity. Cash flow generated by operations prior to working capital totalled RM 88, 335,986 in FY2009 compared with RM 73, 966,653 in FY2008. The Group's working capital has provided positive cash flows in the FY2009 and FY2008. Cash generated from operating activities increased to RM 85, 077,573 in FY2009 from RM 69, 941,205 in FY2008. This provides the Group with significant financial flexibility in meeting operating and investing needs. The Group monitor and maintain a level of cash and cash equivalents and bank facilities to finance the operations and to mitigate the effects of fluctuations in its cash flows. As illustrated in following table, specific results in particular year shown that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts. In addition, the Group also ensure that any current assets other than debts, which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.
Table 3: Cash Flows from Operating Activities
RM
2008
RM
Profit before tax
Adjustments for:
Allowance for doubtful debts
Allowance for doubtful debts no longer required
Amortisation of prepaid lease payments for land
Bad debts written off
Current year provisions
Depreciation of investment properties
Depreciation of property, plant and equipment
Dividend income
Gain on disposal of other investments
Gain on disposal of property, plant and equipment
Gain on disposal of subsidiaries
Impairment loss on goodwill
Impairment losses on investments in subsidiaries
Interest expense
Interest income
Inventories written down
Inventories written off
Loss on disposal of other investments
Loss on disposal of property, plant and equipment
Loss on disposal of subsidiaries
Reversal of provision
Property, plant and equipment written off
Share options granted under ESOS
Waiver of debts
Operating profit before working capital changes
(Increase)/Decrease in inventories
(Increase)/Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Cash generated from operations
Interest paid
Payments for sales campaign, trip and tour incentives
Tax paid
Tax refunded
Net cash from operating activities
75,886,972
102,681
(470)
34,061
106,820
7,108,532
473,320
2,049,618
(803,253)
(162,193)
(112,288)
(1,552)
-
-
1,154,530
(953,563)
5,021,298
406,652
727,283
9,128
-
(2,784,948)
74,337
-
(979)
88,335,896
(281,561)
(10,678,466)
7,701,578
85,077,537
(209)
(7,160,332)
(24,498,652)
8,286
53,426,631
67,716,180
90,942
-
34,061
217,601
4,356,407
429,696
1,767,289
(448,683)
(986,936)
(20,997)
(126,343)
-
-
391,562
(868,813)
847,490
630,168
-
1,005
-
(949,551)
373,459
917,554
(594,741)
73,966,653
(8,951,678)
(11,482,464)
16,408,694
69,941,205
(950)
(1,676,458)
(14,499,245)
-
53,764,552
Source: Adapted from Hai-O's Annual Report 2009
As part of the progression to streamline the operations and repositioning the resources to more profitable business segment, the Group had disposed off its total equity in the dormant companies, Chop Aik Seng Trading Sdn Bhd and Dawin Trading Sdn Bhd for a total cash of RM 20, 000.00 and RM 88, 800.00 on 22 May 2008 and 20 April 2009 respectively. The Group had also restructured its organization by relocating its sub-subsidiary, PT Hai-O Indonesia ("PT Indonesia") to its subsidiary company, Hai-O Marketing Sdn Bhd ("Hai-O Marketing") and the paid-up capital for PT Indonesia had been increased to USD 200,000.00. Consequently, Hai-O Marketing's equity interest in the issued paid-up capital in PT Indonesia represents 60% of the enlarged paid-up capital. PT Indonesia had obtained all compulsory licenses from the local authorities and started its business in August 2009.
During the financial year, the Group had subscribed for 200,000 ordinary shares via its wholly-owned subsidiary, Hai-O (Hong Kong) Investment Limited for USD 1.00 each. This represents 100% equity interest in Hai-O (Guangzhou) Trading Ltd for total cash consideration of USD 200, 000.00. The move is made with the aim to tap new business opportunities in the international market.
As of the end of FY2009, the Group's net cash position and short term investment are totalled up to RM 60 million. The shareholders' fund had also increased to RM 165.7 million with net asset per share of RM 1.99 due to resilient earning growth. Hai-O has continued its steady track record of registered growth for the past 5 years, despite the rising cost and prolonged uncertainties in the global economy.
For the FY2009, the Group's sales achieved a double digit growth of 14% to arrive at RM 435.22 million from RM 373.82 million in the previous financial year. Hence, the profit before tax increased from RM 67.72 million in FY2008 to the current FY2009 of RM 75.89 million. Its growth was supported by strong newly recruited distributor force and the Group's aggressive marketing strategies.
Selected Financial Data
Selected financial data for Hai-O Group are as below:
Table 4: Group's Financial Highlights
Year ended 30 April
2005@
(RM'000)
2006@
(RM'000)
2007@
(RM'000)
2008@
(RM'000)
2009@
(RM'000)
CONSOLIDATED INCOME STATEMENT
Revenue
141,494
146,798
189,346
373,822
435,216
Profit before taxation
10,309
15,127
30,607
67,716
75,887
Taxation
(4,514)
(4,349)
(8,494)
(18,598)
(22,876)
Net Profit for the year
5,795
10,778
22,113
49,118
53,011
Attributable to:-
Equity holders to the Company
5,507
10,183
21,384
48,535
52,290
Minority interest
288
595
729
583
721
Net Profit for the year
5,795
10,778
22,113
49,118
53,011
CONSOLIDATED BALANCE SHEET
Assets
Property, plant and equipment*
49,353
46,002
45,370
44,269
89,571
Investment in associated companies
51
-
-
-
-
Other Investment
2,521
5,985
5,534
2,741
1,156
Trade receivables-non current
501
1,512
1,583
1,373
1,215
Deferred tax assets
-
301
1,080
1,684
2,157
Goodwill on consolidation
365
306
274
85
85
Total current assets
65,507
71,587
95,123
153,958
154,023
TOTAL ASSETS
118,298
125,693
148,964
204,110
248,207
EQUITY AND LIABILITIES
Equity attributable to equity holders
Share capital
65,773
66,329
68,814
83,088
84,457
Share premium
1,384
-
600
1,826
4,791
Reserves & Retained Earnings
18,612
24,230
38,494
61,949
80,396
Treasury shares
(3,875)
(1,165)
(2,243)
(6,291)
(3,911)
Shareholders' equity
81,894
89,394
105,665
140,572
165,733
Minority interest
4,619
4,619
5,215
5,500
6,306
TOTAL EQUITY
86,513
94,013
110,880
146,072
172,039
Liabilities
Non-current liabilities
523
125
58
64
15,812
Current Liabilities
31,262
31,555
38,026
57,974
60,356
TOTAL LIABILITIES
31,785
31,680
38,084
58,038
76,168
TOTAL EQUITY AND LIABILITIES
118,298
125,693
148,964
204,110
248,207
RATIOS
Return on Shareholders' Fund (%)
6.72%
11.39%
20.24%
34.53%
31.55%
Return on Total Assets (%)
4.66%
8.10%
14.36%
23.78%
21.07%
Earnings per share # (cents)
8.72#
16.39#
27.07^
60.41^
63.42^
Gross dividend per share (cents)
6
8
18
40
42
Net assets per share** (cents)
132
137
157
176
199
Notes :
@ Restated as a result of adopting the new and revised accounting standard.
* Including the investment properties and prepaid lease payment for land.
# Calculated based on weighted average number of shares in issue.
^ Calculated based on weighted average number of shares in issue after adjusting for the Bonus Issue in FYE2008.
** Attributable to ordinary equity holders of the Company.
Source: Annual Report 2009
