Retailer AEON Co 1QFY22 net profit grows 27%

KUALA LUMPUR (May 18): AEON Co (M) Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) grew 27.4% to RM28.06 million from RM22.03 million in the same period last year contributed by improved retail margins plus higher impairment of trade receivables in the corresponding quarter.

Quarterly revenue was marginally lower at RM1 billion versus RM1.01 billion due to lower contribution from its retail business segment, its bourse filing showed on Wednesday.

AEON’s retail business recorded revenue of RM857.4 million, a 2.5% drop from RM879 million in the corresponding quarter as more consumers were eating out instead of cooking at home, which affected grocery sales. However, the lower grocery sales were cushioned by improvement in softline.

Aeon managing director and CEO Shafie Shamsuddin in a separate statement said underpinning the overall performance was strong customer activities with effective implementation of marketing communication programmes throughout the quarter resulting in higher footfall at AEON outlets, driving improved sales.

On prospects, AEON said the company will continue to be proactive in crafting the strategies in order to capture consumer spending and minimise the supply chain risk as to ensure sustainable operations and business performances.

It said that with borders reopening and activities amongst the communities increase, consumer spending nationwide is expected to further improve as the nation transitions to the endemic phase of Covid-19.

Nonetheless, the retailer highlighted that the continued global supply chain challenges as a consequence of managing Covid-19 outbreaks, especially in China, as well as the ongoing Ukraine and Russia conflict, may have potential impact on revenue and cost of business.

“Moving forward, AEON endeavours to further grow the new retail business model that is demand-based and more attuned to the present market dynamics, customer consumption patterns and behaviour.

“AEON will further enhance the adeptness of online platforms among its customers and will boost the effort to seamlessly adopt Online-Merge-Offline (OMO) strategy,” added Shafie.

AEON's share price gained three sen to RM1.66, valuing the group at RM2.33 billion.