KUALA LUMPUR (April 9): Aeon Credit Service (M) Bhd's net profit for the fourth quarter ended Feb 29, 2020 (4QFY2020) was flat at RM88.39 million versus RM87.61 million a year earlier, despite recording higher revenue, as it recorded higher interest and tax expenses.
Quarterly revenue grew 15% to RM413.28 million from RM359.54 million a year ago, its stock exchange filing showed.
The group declared a final dividend of 14 sen per share — versus 22.35 sen in 4QFY19— payable on July 16, bringing its full FY2020 payout to 36.25 sen, down from 44.60 sen in FY19.
For its full FY2020 ended Feb 29, the group posted a 17.7% decline in net profit to RM292.05 million from RM354.62 million in FY19, though revenue rose 17% to RM1.6 billion from RM1.37 billion.
The lower profit was mainly due to higher impairment losses on financing receivables of RM450.31 million under MFRS 9 requirements, as compared with RM308.37 million a year ago, it said, as there was a growth of receivables in FY2020.
Aeon Credit's total transaction and financing volume rose by 17.5% to RM1.65 billion in 4QFY2020, from the corresponding period a year ago, and by 22.7% to RM6.38 billion for FY2020.
Its gross financing receivables, as at Feb 29, 2020, stood at RM10.40 billion, up 19.6% from RM8.7 billion a year ago. Non-performing loans ratio was 1.92% compared with 2.04% as at Feb 28, 2019. Other income was recorded at RM41.64 million for 4QFY2020, and RM145.92 million for FY2020, mainly comprising bad debts recovered and commission income from the sale of insurance products.
On prospects, Aeon Credit said domestic demand is predicted to be a key driver, as household spending is likely to be supported by government efforts to drive economic demand.
Notwithstanding this, the company said downside risks are expected to continue to dominate the trade outlook for the country, given the unfavourable economic conditions resulting from the recent Covid-19 pandemic.
“The Covid-19 pandemic will negatively impact the global business environment including the essential services industry, and together with the movement control order (MCO) imposed by the government, it is expected that businesses and operations will be affected significantly for most part of the year.
“With the implementation of additional measures directed by Bank Negara Malaysia to assist borrowers and customers experiencing financial constraints due to Covid-19 outbreak, the company has taken actions to put the necessary measures in place to face the imminent challenges,’ it added.
Aeon Credit shares closed 32 sen or 3.63% higher at RM9.14 today, bringing a market capitalisation of RM2.32 billion. Year-to-date, the counter has fallen over 35% from RM14.14.
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