KUALA LUMPUR (Jul 4): Aeon Credit Service (M) Bhd’s net profit jumped 20.9% in the first financial quarter ended May 31 (1QFY18) to RM75.8 million from RM62.7 million in the previous corresponding period, partly boosted by bad debt recovery and commission earned from sale of insurance products.

The company’s revenue grew 15.5% to RM302.3 million in 1QFY18 from RM261.6 million a year ago.

The improvement of the group’s financial results was attributed to more operating income of RM31.2 million in 1QFY17 from RM27.6 million in 1QFY16, mainly comprising bad debts recovered, commission income from sale of insurance products and AEON Big loyalty programme processing fees.

A filing with Bursa Malaysia highlighted that AEON Credit’s receivables as at May 31 this year was RM6.7 billion, representing an increase of 17.4% from RM5.7 billion recorded a year ago while non-performing loan (NPL) ratio has been rather flat at 2.43% as at May 31, 2017 compared with 2.42% on May 31, 2016.

The group has a lower ratio of total operating expense-to-revenue at 58.2% as at May 31 compared with 60.5% a year ago, mainly attributable to higher growth in interest income and corresponding lower increase in operating expenses.

“Funding cost for 1QFY17 was higher compared with the quarter ended May 31, 2016 due to increase in borrowings of 17.7%. The nominal value of borrowings as at May 31, 2017 was RM5.4 billion compared with RM4.6 billion as at May 31, 2016,” it added.

On its prospects, AEON Credit said it expects to be able to continue with its current financial performance for the financial year ending Feb 28, 2018 (FY18) based on the scheduled implementation of its business plan.

Meanwhile, the company has set the ex-date for its one-for-two bonus issue on July 14, and entitlement date on July 18.

In separate filings with Bursa, there were some changes in the boardroom of the Group, with the resignation of Krishnappan a/l S.P.S Singaram, who will be tasked with a new assignment in the company. Another filing saw the appointment of Ajith a/l Jayaram, who was the head of corporate strategy group, as an executive director as well as the appointment of Tetsuro Takano as a non-independent and non-executive director.

AEON Credit’s share price is hovering around a record high of RM19.15. Year to date, the stock has gained 33%, trading at forward price-earnings ratio of 10.67 times, according to Bloomberg. It closed at RM19.08, down four sen today.