KUALA LUMPUR (Sept 26): AEON Credit Service (M) Bhd (KL:AEONCR) saw its net profit decline 40.8% to RM71.16 million for the second quarter ended Aug 31, 2024 (2QFY2025) from RM120.19 million a year ago, owing to higher impairment losses on financing receivables.

Quarterly revenue expanded 14.8% to RM541.43 million from RM471.73 million.

It declared an interim dividend of 14.25 sen per share for the quarter under review.

The group told Bursa Malaysia that its gross financing receivables came in higher by RM1.63 billion to RM13.20 billion as at end-August 2024. Net financing receivables after allowance for impairment loss was RM12.48 billion as at end-August 2024 versus RM10.81 billion a year ago.

Meanwhile, non-performing loans ratio reduced to 2.37% as at end-August 2024 as compared to 2.98% a year ago, resulting from corrective actions taken.

AEON Credit noted that its ratio of total operating expenses against revenue for the current quarter was recorded at 68.1% as compared to 58.3% in the preceding year corresponding quarter.

“The increase in the ratio of operating expenses was mainly attributable to the higher impairment losses on financing receivables of RM193.584 million as compared to RM120.574 million for the preceding year corresponding quarter,” it explained.

For the first half ended Aug 31, 2024 (1HFY2025), AEON Credit’s net profit also slipped 19.1% to RM177.57 million against RM219.55 million in the same period a year ago, on the back of a 15.1% increase in revenue to RM1.06 billion from RM924.4 million previously.

Looking ahead, AEON Credit said it will continue to remain prudent and cautious, placing emphasis on growing quality assets and closely monitoring the inherent credit risks in its financing portfolios.

“The group will continuously enhance its information technology capabilities to improve on operational efficiencies while establishing an ecosystem to be built from the AEON group of companies operating in Malaysia to expand its customer reach. Barring any unforeseen circumstances, the group anticipates being able to maintain its business momentum through implementing the appropriate measures for the financial year ending Feb 28, 2025,” it explained.

Having gained 32% year to date, AEON Credit’s share price closed unchanged at RM7.35 on Thursday for a market value of RM3.75 billion.