Aeon Credit's 3Q net profit up 23.5% as revenue improves

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KUALA LUMPUR (Dec 20): Aeon Credit Service (M) Bhd's net profit rose 23.5% to RM87.14 million in the third financial quarter ended Nov 30, 2018 (3QFY19) from RM70.55 million a year ago, as revenue improved on stronger interest income, profit revenue, finance charges and fee income.

Revenue grew 11.6% to RM348.5 million from RM312.34 million a year ago. Earnings per share rose to 33.35 sen from 28.74 sen, its bourse filing today showed.

The group’s impairment loss on financing receivables in 3QFY19 was also lower at RM61.51 million versus RM86.49 million a year ago.

Funding cost for the current quarter, however, was higher compared to the preceding year's corresponding quarter mainly due to higher borrowings in line with the growth of receivables. The nominal value of borrowings as at end-November this year was RM6.348 billion, versus RM5.513 billion as at end-November last year.

For the cumulative nine months (9MFY19), Aeon Credit's net profit rose 22.6% to RM267.01 million from RM217.75 million in the same period last year, while revenue rose 8.7% to RM1.01 billion from RM925.95 million.

The group's gross financing receivables rose 15.4% to RM8.31 billion as end-November, compared with RM7.2 billion as at end-November last year. Net financing receivables after impairment rose to RM7.74 billion from RM7.03 billion. Non-performing loans (NPL) ratio retreated to 2.1% from 2.5%.

Other income was recorded at RM27.999 million for 3QFY19 and RM105.574 million for 9MFY19, mainly comprising bad debts recovered, commission income from the sale of insurance products and loyalty programme processing fees.

Aeon Credit said total transaction and financing volume in 3QFY19 increased 49.5% year-on-year to RM1.488 billion, whereas 9MFY19's rose 26.4% year-on-year to RM3.887 billion.

On prospects, Aeon Credit expects to be able to maintain its financial performance for its FY19 ending Feb 28, based on the scheduled implementation of its business plan.

Aeon Credit shares closed up 20 sen or 1.4% at RM14.84 today, bringing a market capitalisation of RM3.7 billion.