KUALA LUMPUR (April 25):  Aeon Credit Service (M) Bhd’s net profit for the fourth quarter ended Feb 28, 2019 (4QFY19) rose 6.45% to RM87.61 million from RM82.31 million a year ago on higher revenue, thanks to stronger interest income, profit revenue, finance charges and fee income.

Its quarterly revenue grew 16.29% year-on-year (y-o-y) to RM359.54 million from RM309.17 million, its bourse filing today showed.

Its board recommended a final dividend of 22.35 sen — payable on July 19, subject to shareholders approval — as opposed to the 20 sen it announced in the same quarter last year. This will raise its FY19 payout to 44.6 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-Feb last year. Net financing receivables after impairment increased to RM8.11 billion compared with RM6.703 billion previously. Non-performing loans (NPL) ratio retreated to 2.04% from 2.33%.

Other income was recorded at RM48.13 million for 4QFY19 and RM153.71 million for the entire FY19, mainly comprising bad debts recovered, commission income from sale of insurance products, and loyalty programme processing fees.

Ratio of total operating expense against revenue, however, recorded at 62.3% for the current quarter compared with 59.8% in the preceding year’s corresponding quarter. “The increase was in tandem with the growth of financing receivables,” Aeon Credit said.

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 compared with 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 be able 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 the AEON brand.

Aeon Credit shares closed unchanged at RM16.78 today, giving it a market capitalisation of RM4.21 billion. In the past year, the stock has climbed nearly 34%.