Amway’s 3Q net profit doubles to record high as weaker sales leads to lower incentives payout

KUALA LUMPUR (Nov 15): Amway (Malaysia) Holdings Bhd posted record earnings in the quarter ended Sept 30, 2023 (3QFY2023) despite lower revenue, with net profit more than doubling year-on-year, as the group paid significantly lower incentives to its “Amway Business Owners”, in line with lower sales recorded.

The improved profitability came after Amway issued a profit warning in August, taking into consideration that inflation would squeeze consumers’ purchasing power and appetites to spend.

Net profit for 3QFY2023 jumped 146% to RM46.21 million or 28.11 sen per share, from RM18.75 million or 11.41 sen per share a year ago (3QFY2022), despite revenue falling 10.3% to RM333.47 million from RM371.79 million, according to the group’s stock exchange filing on Wednesday.

Amway attributed the lower revenue to softer demand in health and wellness products and home appliances. The group proposed an interim dividend of five sen, with ex-date on Nov 30.

For the cumulative nine-month period (9MFY2023), Amway recorded a net profit of RM83.52 million, which already surpassed the RM76.9 million recorded for the full FY2022, and which was 54.9% higher than the RM53.90 million for 9MFY2022.

Revenue for 9MFY2023 declined 6.1% to RM1.05 billion, from RM1.12 billion in the previous corresponding period.

Amway said this reduction was primarily due to persistent inflationary pressure, which had a significant impact on consumer sentiment and spending capacity, as well as shifts in consumer spending patterns post-pandemic.

“Given the ongoing challenges, the group anticipates a reduction in its revenue for the full year of 2023 (FY2023),” it said.

“The group foresees an increase in profit for the full year of 2023, but this increase is expected to be of a smaller magnitude when compared to the first nine months,” it added.

Shares of Amway closed four sen or 0.8% higher at RM5.25 on Wednesday, giving it a market capitalisation of RM863.02 million.

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