This article first appeared in The Edge Financial Daily on April 26, 2019

KUALA LUMPUR: AEON Credit Service (M) Bhd’s net profit for the fourth quarter ended Feb 28, 2019 (4QFY19) rose by 6.45% to RM87.61 million from RM82.31 million a year ago on higher revenue, thanks to stronger interest income, finance charges and fee income.

Its quarterly revenue grew 16.29% year-on-year to RM359.54 million from RM309.17 million previously, its bourse filing yesterday showed.

Its board recommended a final dividend of 22.35 sen — payable on July 19, subject to shareholders’ approval — as opposed to 20 sen in the same quarter last year. This will raise its FY19 payout to 44.60 sen from FY18’s 41.13 sen.

According to AEON Credit, its gross financing receivables rose 18.8% to RM8.69 billion as at Feb 28, 2019 compared with RM7.32 billion as at end-February last year.

Net financing receivables after impairment increased to RM8.11 billion compared with RM6.703 billion previously. Non-performing loans ratio retreated to 2.04% from 2.33%.

 Funding cost for the current quarter was also 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 the borrowings as at Feb 28, 2019 was RM6.488 billion as compared to RM5.399 billion as at 28 February 2018.

For FY19, cumulative net profit was 18.19% higher at RM354.62 million against RM300.06 million in FY18, as revenue grew 10.58% to RM1.37 billion from RM1.24 billion.

On prospects, AEON Credit expects to maintain its financial performance for its FY20 ending Feb 28, based on the scheduled implementation of its business plan and leveraging on the strength of ‘AEON’ brand.