AEON Credit Service (M) Berhad (“AEON Credit” or the “Group”) today announced that it has recorded a profit before tax (“PBT”) and profit after tax (“PAT”) of RM215.54 million and RM163.07 million respectively for the first quarter ended 31 May 2022 (“Q1FYE23”), marginally lower as compared to RM215.86 million and RM163.09 million recorded in the preceding year’s corresponding quarter ended 31 May 2021
(“Q1FYE22”) respectively.
AEON Credit’s transaction and financing volume for Q1FYE23 increased by 5.6% to RM1.49 billion as compared to RM1.41 billion recorded in Q1FYE22. However, the Group’s revenue for Q1FYE23 of RM390.57 million decreased by 5.0% as compared to the RM410.97 million posted in the Q1FYE22, mainly attributable to the lower average financing receivables as compared to the Q1FYE22.
Gross financing receivables in Q1FYE23 registered a slight decrease of RM61.87 million to RM10.00 billion compared to RM10.06 billion recorded in Q1FYE22. The slower growth in the quarter was due to lower market demand attributable to the special EPF withdrawal program and supply chain disruptions in vehicle financing. The Group has deployed various marketing campaigns and merchant partnership programs to drive sales and financing receivables growth. Non-Performing Loans (“NPL”) ratio was 2.53% in Q1FYE23 as compared to 1.75% as at Q1FYE22 while the loan loss coverage ratio stood at 281% as
compared to 409% in the preceding year’s corresponding quarter.
The higher other income in Q1FYE23 was contributed by the higher bad debt recoveries. Ratio of total operating expenses against revenue was recorded at 40.0% for the current quarter as compared to 38.6% in Q1FYE22 mainly due to higher impairment losses on financing receivables of RM37.28 million as compared to RM23.25 million in Q1FYE22, partially offset by lower other operating expenses.
Prospects
In the first quarter of 2022, the Malaysian Gross Domestic Product (“GDP”) improved by 5.0% year-on-year compared to 3.6% in the fourth quarter 2021 supported by strong domestic demand. Meanwhile, Bank Negara Malaysia has forecasted that Malaysia’s economic growth is on track to expand by 5.3% – 6.3% in 2022 upon the greater reopening of economic and social sectors, supported by increases in external demand from major trading partners.
The current global environment remains very challenging, with broad inflation gaining momentum globally and additional supply chain disruptions due to the war in Ukraine. However, the reopening of borders and easing of quarantine requirements in Malaysia as well as other nations are expected to spur economic growth and consumer spending. The Group is cautiously optimistic that business revenue will eventually increase to the level it was prior to the pandemic.
Nevertheless, the Group will continue to closely monitor and assess the inherent credit risks in its financing portfolios, with proactive attention focused on the enhancement of asset quality, prudent cost management, and improvement of financial and operational efficiencies by leveraging on its positive business fundamentals.
The Group is committed to building on its business sustainability and growth agenda and will be continuously enhancing its information technology capabilities to drive the digitalisation of its operations. Barring any unforeseen circumstances, the Group expects to be able to maintain its financial performance by putting in place the appropriate measures for the financial year ending 28 February 2023.