Aeon Co 2Q net profit down 65% on impairment loss at associate

-A +A

KUALA LUMPUR (Aug 29): Aeon Co (M) Bhd’s second quarter net profit plunged 64.47% to RM9.79 million from RM27.55 million a year earlier, due to losses at an associate company.

Earnings per share in the quarter ended June 30, 2018 (2QFY18) fell to 0.7 sen from 1.96 sen previously, the group said in a filing with Bursa Malaysia.

Quarterly revenue was up 5.41% at RM1.06 billion from RM1.01 billion in 2QFY17.

Aeon Co said that during the quarter, the group recognised an impairment loss of RM8.01 million from its investment in associate company Index Living Mall Malaysia Sdn Bhd.   

In addition, the group’s share of operating loss at the associate was RM11.4 million.

Aeon Co said Index Living Mall, a furniture retailer majority-owned by a Thai company, will close down its remaining outlets in Malaysia.

Turning to its retail business, the group said revenue in 2QFY18 rose 23.4% to RM170.9 million, from RM165.3 million a year ago, mainly due to contribution from two new shopping malls and a newly renovated and expanded store.

Contributions from new and refurbished shopping malls also led to revenue from the group’s property management services segment rising 3.4% to RM170.9 million from RM165.3 million in 2QFY17.

For the first six months of FY18, the group’s net profit fell 29.81% to RM37.73 million, from RM53.75 million in the previous corresponding period, while revenue went up 4.41% to RM2.18 billion from RM2.09 billion.

Moving forward, Aeon Co said the FY18 performance will be impacted by the recognition of impairment loss on its investment in Index Living.

The group also expects the sales and service tax, to be implemented from Sept 1, to have some impact on consumer spending and pricing of products.

Aeon Co's share price closed unchanged at RM2.10 today, giving it a market capitalisation of RM2.95 billion.