KUALA LUMPUR (June 27): AEON Credit Service (M) Bhd posted a 14.7% decrease in net profit to RM84.60 million for its first quarter ended May 31, 2019 (1QFY20), against RM99.24 million in the same corresponding quarter last year, mainly due to higher allowance for impairment losses.
In a statement today, AEON Credit said the allowance for impairment losses was higher as early recognition required under Malaysian Financial Reporting Standards (MFRS 9) amounted to RM93.34 million, compared with RM57.1 million in 1QFY19, in line with receivables growth of RM1.64 billion during the quarter under review.
Additionally, the lower net profit was also attributed to higher funding costs incurred during the period, mainly due to higher borrowings, in line with the growth of receivables.
As at May 31, the nominal value of borrowings stood at RM6.926 billion, against RM5.528 billion at the same time last year.
The group recorded a 16.2% year-on-year increase in revenue to RM378.59 million from RM325.72 million in 1QFY19, which AEON Credit said corresponds with the 50.4% year-on-year increase in total transaction and financing volume to RM1.647 billion.
AEON Credit managing director Yuro Kisaka said the financial performance in 1QFY20 has been underpinned by a strong increase in transaction and financing volume, represented by stable consumer demand.
“We are pleased with the company’s performance for the quarter under review, as we continue to see stable economic growth, mirrored by consumer demand supported by growth in income and employment,” he said.
Kisaka added that the company will continue to focus on implementing digitisation initiatives to achieve operational and costs improvements.
“These digitisation initiatives will continue to be prioritised, in order to make operations more cost-effective and at the same time, offer our customers more choices and have better market reach,” he said.
Shares of AEON Credit closed unchanged at RM16.92 today, valuing the company at RM4.245 billion.