AEON's net profit dips to RM41.42 mil in FY2020

AEON's net profit dips to RM41.42 mil in FY2020
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KUALA LUMPUR (Feb 24): AEON Co (M) Bhd’s net profit for the financial year (FY) ended Dec 31, 2020, fell to RM41.42 million from RM109.229 million registered last year.

Revenue also declined 10.7% to RM4.05 billion from RM4.54 billion previously, due to lower revenue from the retailing segment and property management services by RM387.6 million and RM100 million, it said in a filing with Bursa Malaysia today.

AEON said revenue from its retail segment was affected by lower non-essential category sales, namely hardline and soft-line products as a result of the Covid-19 pandemic and Movement Control Order (MCO), as well as other related restrictions since March 18, 2020, whereby general merchandise and specialty stores were not allowed to operate for almost two months during the period under review.

“However, it was offset by a slight increase in revenue generated from the food-line.

“Consumer spending pattern has shifted to prioritising essential goods and going digital, while at the same time, consumer sentiment and confidence remain weak resulting in cautionary spending behaviour,” it noted.

It said the shortfall in revenue was mainly due to lower occupancy rates, as tenants sought for non-renewal or early termination of tenancy agreements.

“Rental commission receivable and car park income were significantly impacted as a result of subdued footfall at the shopping mall.

“Income from temporary space rental was also affected by the absence of events and activities which were being prohibited by the MCO,” it said.

On prospects, AEON said while 2020 had been a difficult year, the pandemic gave retailers an opportunity to re-strategise their operational, merchandising and marketing strategies, in line with consumers’ changing shopping habits.

“The pandemic has also accelerated digital adoption among retailers, while consumers increasingly turn to digital channels.

“On Jan 27, 2021, the company signed an agreement with US-based Boxed to utilise its state-of-the-art technology to accelerate expansion into ‘New Retail’ offerings and redefine shopping experience for customers,” it said.

Nevertheless, AEON said it remains confident and optimistic about growth opportunities in the medium- to long term and is committed to taking a proactive approach to maintain competitiveness in the market.