AEON CREDIT'S Q3 PROFIT HIT BY HIGHER IMPAIRMENT LOSSES

KUALA LUMPUR, Dec 19 -- Aeon Credit Service (M) Bhd's net profit fell to RM69.93 million for the third quarter (Q3) ended Nov 30, 2019, from RM87.14 million a year ago, mainly dragged by higher impairment losses.

In a filing with Bursa Malaysia today, the non-bank financial services provider said impairment loss on financing receivables in the quarter under review rose to RM114.47 million from RM61.51 million previously, bringing the net financing receivables after impairment to RM9.33 billion as at Nov 30, 2019, compared with RM7.74 billion as at Nov 30 last year. 

Revenue, however, rose to RM402.46 million from RM348.50 million a year earlier, supported by higher total transaction and financing volume, which increased by 9.4 per cent year-on-year to RM1.59 billion.

"Non-performing loans ratio was 1.93 per cent as at Nov 30, 2019, compared to 2.05 per cent as at Nov 30, 2018.

"Other income was recorded at RM31.16 million for the current quarter (Q3), mainly comprising bad debts recovered and commission income from sale of insurance products," it said.

For the nine-month period ended Nov 30, Aeon Credit saw its net profit slid to RM203.66 million from RM267.01 million.

"The lower pre-tax profit (of RM272 million) for the financial period-to-date (versus RM357.07 million previously) was mainly due to increased impairment losses on financing receivables of RM362.50 million under MFRS 9 requirements compared to RM213.85 million recorded in the previous year's corresponding period, which was mainly attributable to the growth of receivables during the period under review," it said.

Total revenue for the financial period to-date stood at RM1.19 billion against RM1.01 billion in the same period in the preceding year, it said.

"Loan loss coverage ratio stood at 363 per cent as at Nov 30, 2019, compared to 338 per cent in the same period last year," it added.

On its prospects, Aeon Credit said domestic demand would continue to be one of the key drivers of the country's economic growth and household spending was likely to be supported by growth in income and employment. 

"The company will remain prudent and cautious, placing emphasis on growing quality assets, as well as enhancing cost and operational efficiency moving forward," it said.

-- BERNAMA