KUALA LUMPUR (May 25): Amway (Malaysia) Holdings Bhd’s net profit for the first quarter ended March 31, 2022 (1QFY22) rose marginally to RM20.17 million from RM20.11 million a year ago, according to its bourse filing on Wednesday (May 25).
This was despite a 10.63% increase in revenue to RM391.23 million from RM353.65 million a year ago, mainly driven by stronger demand for health and wellness products amid pre-price increase buy up, good responses for overall promotion and growth in the buyer base due to increased Amway Privileged Customer (APC) count.
The multi level marketing company’s profit before tax was almost unchanged at RM26.66 million compared to RM26.75 million in the previous corresponding quarter on higher “core plus” sales incentive due to the timing of “true up” adjustment only taking place in the second half of the prior year for higher incentive accrual.
It declared a first single tier interim dividend of five sen per share, payable on June 24 to shareholders registered as at June 13.
On a sequential basis, Amway’s net profit increased more than 23-fold from RM852,000 in 4QFY21, mainly due to “true up” adjustment in view of the higher pay-out for Amway Business Owners’ (ABO) bonus and selling expenses in the preceding quarter.
Revenue, on the other hand, slipped from RM392.41 million due to higher base in the previous quarter, with the launch of Atmosphere Mini and extended trade-in promotion for Sky (air purifier), mitigated by stronger demand for health & wellness products and pre-price increase buy-up.
Looking ahead, Amway is optimistic to deliver a moderate topline sales growth forthe full year 2022.
“The group continues to strategically and prudently invest in specific areas to achieve long-term business growth, such as ABO centric programmes, new product launches & promotions, as well as ongoing upgrades to the digital platform and related delivery infrastructure.
“However, the costs associated with these investments, along with inflationary risk, will exert pressure on the group’s operating margin.
“For the full year, the Group anticipates improving profitability marginally by mitigating these headwinds through several strategies, including the normalisation of the sales incentive plan which was rolled out in the prior year,” it added.
Amway shares slipped two sen or 0.39% to close at RM5.11 on Wednesday, giving it a market capitalisation of RM840.01 million.
Source: TheEdge - 26 May 2022
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