KUALA LUMPUR (Nov 17): Amway (Malaysia) Holdings Bhd’s net profit for the third quarter ended Sept 30, 2021 (3QFY21) plunged 49% to RM7.96 million from RM15.61 million a year ago, due to a new sales incentive plan and increased sales incentives provision in view of a higher number of qualifiers.

This was despite 19.25% higher quarterly revenue of RM383.93 million from RM321.95 million a year ago, its filing to Bursa Malaysia showed.

Earnings per share (EPS) fell to 4.84 sen from 9.5 sen a year ago.

The group has declared a third single-tier interim dividend of five sen per share for the financial year ending Dec 31, 2021 (FY21) which will be paid on Dec 17.

This brings its total dividend payout for the financial year thus far to 15 sen. A year ago, it also paid out total dividends of 15 sen for the nine months ended Sept 30, 2021 (9MFY21).

The group attributed the higher revenue to continuous good demand for nutrition and wellness products and its newly-launched air purifier Atmosphere Mini.

This was also driven by the Amway Privileged Customer (APC) programme and strong field momentum motivated by the newly introduced sales incentive plan in January 2021, it said.

On a quarter-on-quarter basis, the group’s net profit increased by 1.32% from RM7.86 million in 2QFY21 while its revenue expanded 7.87% from RM355.91 million. EPS declined to 21.86 sen from 25.93 sen.

For 9MFY21, the group’s net profit fell 15.71% to RM35.93 million from RM42.63 million a year ago while its revenue grew 30.58% to RM1.09 billion from RM837.4 million.

On its prospects, the group said its various initiatives and investments — such as the launch of the APC programme, new sales incentive programmes, and new product launches and promotions — have provided solid fundamentals and delivered strong year-to-date results.

In addition, the group has also reduced the sign-up fee from September 2021 to December 2021 to increase new Amway Business Owners (ABO) and customer recruitment.

“On the back of these initiatives, the group is optimistic in delivering strong revenue growth for 2021,” it said.

The group said it continues to strategically and prudently invest in specific areas to achieve long-term business growth, such as ABO-centric programmes, new product launches and promotions, as well as further improvements to the digital platform and related delivery infrastructure.

However, it noted that the cost associated with these investments including new sales incentives will exert pressure on the group’s operating margin.

Amway was unchanged at RM5.56 on Wednesday, valuing the group at RM912.34 million. However, year-to-date, it has fallen 4.14%.