AEON Credit Service posted a 5.4% rise in revenue of RM410.97 million for the first quarter ended 31 May 2021 compared to the RM389.88 million achieved in the corresponding quarter of last year.
The company’s total transaction and financing volume had increased by 80.9% to RM1.41 billion versus first quarter last year which was heavily impacted by the Movement Control Order imposed by the Government in March 2020. Transaction and financing volume also saw an increase by 11.5% as compared to preceding quarte, which registered at RM1.26 billion.
Correspondently, both profit before tax and profit after tax recorded at RM215.86 million and RM163.09 million, significantly increased by 482.0% and 520.6% compared to RM37.09 million and RM26.28 million respectively. The higher PBT was mainly due to lower impairment loss and prudent cost management recorded in the current quarter.
The Company’s gross financing receivables have a slight decrease of RM460.07 million to RM10.06 billion compared to RM10.52 billion. The Non-Performing Loans ratio stood at 1.75% as of 31 May 2021 compared to 1.42% as of 31 May 2020.
On the ratio of total operating expense against revenue was recorded at 38.6% for the current quarter as compared to 71.2% in 2021. The decrease was mainly due to lower allowance for impairment losses on financing receivables of RM23.25 million as compared to RM174.37 million.
For the rest of the year, AEON Credit is wary on the situation Malaysia is going through at the moment, earlier this year the Malaysian Gross Domestic Product improved with a slower contraction of 0.5% year-on-year compared to 3.4% contraction recorded at the end of 2020. The improvement in the Malaysian GDP contraction was due to the growing domestic demand and strong exports performance. Subsequently, Bank Negara Malaysia has forecasted the domestic economy to grow between 6.0% and 7.5% on the back of the stronger domestic demand.
However, the downside risk to growth still remains, as the reimposition of the Full Movement Control Order (“FMCO”) and the Enhanced MCO “EMCO” in key parts of the Klang Valley by the Government will result in the potential slowdown of business transactions for the coming quarters.
The MCO has impacted AEON Credit’s customers heavily, however it still managed to recover its sales and business performance despite the challenges that they faced in the preceding quarter. It will closely monitor and assess the inherent credit risks in its financing portfolio. Despite the challenges, the credit service provider is confident that its in the position to grow its business further and stronger through digital transformation and maintain the financial performance for the complete year.