by NUR HAZIQAH A MALEK / pic by TMR FILE

AEON Credit Service (M) Bhd’s net profit rose to RM163.09 million in the first quarter of its financial year 2022 ended May 31, 2021 (1QFY22), from RM26.28 million posted in the same quarter last year, driven by higher sales and financing.

Revenue increased by 5.4% to RM410.97 million from RM389.88 million previously, it said in a filing to Bursa Malaysia yesterday.

Its total transaction and financing volume in the current quarter rose by 80.9% to RM1.41 billion from RM778.57 million in 1QFY21, as its performance was affected by the implementation of the Movement Control Order.

As of May 31, 2021, its gross financing receivables fell by RM460.07 million to RM10.06 billion, compared to the same period last year.

AEON’s gross financing receivables after allowance for impairment loss was RM9.34 billion in 1QFY22 compared to RM9.76 billion in 1QFY21, while its non-performing loans ratio stood at 1.75% compared to 1.42% previously.

The group’s other income for the current quarter was recorded at RM49.19 million, mainly comprising bad debts recovered, insurance commission, as well as interest and profit income from deposits with licensed financial institutions.

Meanwhile, the ratio of total operating expenses against revenue was at 38.6% for the quarter, against the previous 71.2% due to the lowered operating expenses caused by the decreased impairment losses on financing receivables of RM23.25 million versus RM174.37 million previously.

The nominal value of borrowings was also lower at RM7.87 billion versus the previous RM8.24 billion.

The group noted that it managed to recover its sales and business performance despite the challenges in 1Q.

“The company will continue to closely monitor and assess the inherent credit risks in its financing portfolio, with proactive attention focusing on enhancement of asset quality, prudent cost management and improvement on financial and operational efficiencies by leveraging its positive business fundamentals.

“It is committed to striving in building its business sustainability agenda and will be continuously investing in information technology to drive the digitalisation of its operations,” it said in an exchange filing.

The company expects to be able to maintain its FY22 performance ending Feb 28, 2022.

Yesterday, the group’s share price closed 0.17% lower at RM11.78 versus its previous close of RM11.80.