AEON Credit Service (M) Berhad (“AEON Credit” or the “Group”) today announced that it has recorded a revenue growth of 7.6% to RM1.64 billion for the financial year ended 28 February 2023 (“FYE23”) compared to RM1.52 billion recorded in the preceding year ended 28 February 2022 (“FYE22”).

Both PBT and PAT for FYE23 showed improvement of 3.8% and 14.3% or RM546.98 million and RM417.69 million respectively, as compared to RM526.82 million and RM365.42 million for FYE22, due to a special one-off tax known as prosperity tax (“Cukai Makmur”) under Malaysian Finance Act 2021. The revenue increased by 7.6% contributed by higher transaction and financing volume which surged by 31% in FY23 to RM6.25 billion, as compared to RM4.77 billion recorded in FYE22, due to lower operating expenses attributed by disciplined cost management and manpower efficiency.

Correspondingly, the gross financing receivables increased by RM978.39 million or 10.3% to RM10.84 billion in FYE23 as compared to RM9.86 billion recorded in FYE22.

For the quarter under review, the Group has recorded a revenue growth of 19.2% to RM432.66 million for the fourth quarter ended 28 February 2023 (“Q4FYE23”) as compared to the RM362.97 million recorded in the preceding year corresponding quarter ended 28 February 2022 (“Q4FYE22”), mainly due to the increase of interest income and fee income by 19.2%, which was primarily driven by objective financing (61%) and motor financing (25%) segment.

AEON Credit registered a profit before tax (“PBT”) of RM129.81 million, representing a significant increase of 189.8% as compared to RM44.79 million recorded in the preceding year corresponding quarter attributed by an improvement in the collection and sales performances as well as cost efficiency. While the Group’s profit after tax (“PAT”) registered a 307.8% surge to RM95.34 million from RM23.38 million recorded in Q4FYE22 and this has resulted in the 392.7% increase of earnings per share from 7.17 sen in Q4FYE22 to 35.34 sen for Q4FYE23. AEON Credit’s transaction and financing volume in Q4FYE23 increased by 9.3% to RM1.60 billion as compared to RM1.46 billion recorded in Q4FYE22.

The Non-Performing Loans (“NPL”) ratio was 2.89% in Q4FYE23 as compared to 2.66% in Q4FYE22 while the loan loss coverage ratio stood at 252% as compared to 289% in the preceding year’s corresponding quarter.

The Board has recommended the payment of a final single-tier dividend of 21.00 sen per share to be paid on 20 July 2023, subject to the approval of shareholders at the forthcoming Annual General Meeting to be held on a date that shall be announced later.

Prospects
Malaysia’s economy recorded an encouraging performance with the Gross Domestic Product (GDP) for 2022 recording an 8.7% growth. This is supported by a strong economic performance in the fourth quarter of 2022 which saw a recovery in private spending and investment, a decrease in unemployment and the strengthening of the ringgit.

Bank Negara Malaysia has projected that Malaysia’s GDP will moderate to a range of 4% to 5% this year. The slowdown in global growth is expected to impact exports, while concerns about elevated living costs and input costs may affect household and business spending. Consequently, most economic sectors are expected to expand at a more moderate pace, reflecting the anticipation of slower global growth and the normalization of high growth rates from the previous year.

However, the growth in the consumer and tourism-related subsectors is expected to continue to drive the economy, while export-oriented subsectors are expected to moderate in line with the slower global growth. Notwithstanding the challenges, the resolution of labor shortages and the easing of supply chain disruptions are expected to lend support to most economic activities.

Against the challenging backdrop emanating from inflationary headwinds, AEON Credit hopes to maintain a modest growth trajectory in FYE24. The Group remains committed to closely monitoring and assessing inherent credit risks in its financing portfolios to ensure sustainable growth. AEON Credit recognises the importance of staying in tune with the rapidly changing economic landscape and is committed to respond with proactive measures to enhance asset quality, practice prudent cost management, and improve financial and operational efficiencies.

Looking ahead, AEON Credit is focused on building its long-term business sustainability and growth agenda. The Group will continue to invest in initiatives to enhance its information technology capabilities to augment its operations. Barring any unforeseen circumstances, the Group expects to be able to maintain its financial performance by putting in place the appropriate measures for the financial year ending 29 February 2024.