Monday 22 Apr 2024
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KUALA LUMPUR (Nov 18): Amway (Malaysia) Holdings Bhd's net profit for the third quarter ended Sept 30, 2015 (3QFY15) more than halved to RM11.78 million or 7.17 sen per share from the RM25.02 million or 15.22 sen per share seen in the same quarter last year, largely on higher import costs, higher sales and marketing expenses, and a less favourable sales mix.

The higher import cost was due to the stronger US dollar and higher transfer price, while its higher sales and marketing expense was to support Amway Business Owners (ABOs) to grow their business after the implementation of the goods and services tax (GST), according to its filing with Bursa Malaysia today.

Its revenue, however, strengthened 10.3% to RM241.68 million from RM219.12 million, primarily due to continuous strong momentum coupled with the successful launch of its BodyKey personalised weight management programme.

The weaker earnings notwithstanding, the group declared a third interim single-tier dividend of 10 sen per share in respect of FY15, payable on Dec 15, bringing its year-to-date dividend to 30 sen per share.

For the cumulative nine-month period (9MFY15), its net profit was down 23.2% to RM58.85 million or 35.8 sen per share from RM76.62 million or 30 sen per share in 9MFY14, as a result of the same factors affecting its quarterly profit slide.

Revenue for the period came in 20.1% higher at RM751.65 million from RM625.93 million last cumulative period in FY14, mainly due to a strong buy up in the first quarter, pre-GST.

Looking forward, Amway Malaysia expects the strong revenue trend to continue into the fourth quarter.

"However, the higher cost of import and sales and marketing promotion costs together with less favourable sales mix [will] continue to have an adverse impact on operating margin," it added.

In a statement, Amway Malaysia executive director Paul Yee Kee Bing said the group's sales momentum was stronger than anticipated and he expects the group to close 2015 with another record year, even as he admits that profit margin continued to be under pressure.

"We will stay focused on supporting our ABOs grow their business," he added.

The direct marketing company also announced that Yee will be succeeding its managing director (MD) and president of Amway Southeast Asia, 55-year-old Low Han Kee, when the latter retires on Feb 1, next year. Low has served the company for 26 years. He was appointed MD in 1998.

Meanwhile, James Bradley Payne, the group's non-independent non-executive director will step down from the board with effect from tomorrow (Nov 19), after being appointed to the post since November 2011. He is currently vice chairman of Alticor Inc, the parent company of Amway Malaysia.

Amway Malaysia said Amway South East Asia MD Martin Liou will be appointed as its new non-independent non-executive director; he will also assume responsibility for the Southeast Asia markets upon Low's retirement.

Shares in Amway Malaysia closed unchanged at RM9.72 today, for a market capitalisation of RM1.59 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)


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