KUALA LUMPUR: AEON Co. (M) Bhd more than doubled its profits in the third quarter ended Sept 30, as improved retail margin offset lower sales.
This saw its net profit increase by 123% to RM16.35mil in the third quarter ended Sept 30, 2020 from RM7.32mil
The results were "backed by the improvement in retail margin, change in marketing mechanics as well as the agility to adapt to the current cost structure," the company said in a statement on Wednesday.
Its earnings were also boosted by a change in marketing mechanics as well as agility to adapt to the current cost structure.
Retail business revenue fell by 5.9% to RM836.23mil from RM888.58mil due to shifts in consumer sentiments and cautionary consumer spending due to the impact from the Covid-19 pandemic.
Its revenue from property management services was down by 11.8% to RM153.39mil, mainly due to rental waivers and rebates to tenants, lower of rental income and sales commission receivable.
Aeon said this was as a result of lower occupancy rate amidst the uncertainties arising from the pandemic and economic recover post-MCO.
When compared with the second quarter, revenue rose by 3.7% to RM989.62mil due to positive consumer sentiment after the relaxation of the Recovery Movement Control Order (RMCO) during the quarter under review.
Profit before tax of RM35.75mil, a sharp increase from RM830,000 in 2Q due to higher revenue generated in 3Q and its agility to adapt to the current cost structure.
However, for the nine months, its net profit fell by 76% to RM14.27mil from RM59.41mil in the previous corresponding period. Its revenue declined by 6.9% to RM3.13bil from RM3.36bil.
The weaker results were mainly due resulted from MCO whereby non-essential services were not allowed to operate from March 18 until May 12 coupled with the soft recovery of consumer sentiments and cautionary consumer spending as the impact from the pandemic.
“This has significantly impacted the revenue from general merchandise (GMS), specialty stores and revenue generated from property management services segment, ” it said.
Aeon said the profit before tax fell by 43.5% to RM61.9mil from RM109.6mil mainly due to the lower of sales generated from retail and property management services segment.
However, it was offset by its agility to adapt to the current cost structure.
On the outlook, Aeon said the Covid-19 has created massive challenges for retailers around the world.
It also said it committed to support local entrepreneurs by providing a platform, both online and through physical stores to showcase, promote and sell their products.
“The existential challenges prompted the Company in re-strategise the business model, rethink the cost of doing business and strengthen the relationship with the customers.
“The company will focus on digitalisation investment to support business growth. The company remains confident and optimistic about the growth opportunities in the medium to long term and committed to take proactive approach and continuously stay competitive in the market, ” it said.
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