Key segments continue to operate positively for AEON Credit
KUALA LUMPUR: AEON Credit Service (M) Bhd (AEON Credit) has seen a good showing in its results for the first nine months of financial year 2018 (9MFY18) as its earnings climbed 5.2 per cent year on year (y-o-y) higher to RM70.6 million.
The group’s cumulative earnings accounted for 77.6 per cent and 79.5 per cent of MIDF Amanah Investment Bank Bhd’s (MIDF Research) and consensus’ expectations respectively.
This is supported by steady progression in income of its biggest segments namely automobile financing, personal financing and motorcycle easy payment.
“On a quarterly basis, the group’s net profit in the third quarter of financial year 2018 (3QFY18) appeared flat. This is attributable to higher operating income in key segments,” it said in a review of the firm.
AEON Credit’s overall earnings moderately improved, it said, due to growth in income of automobile financing, personal financing and motorcycle easy payment. Personal financing which accounted for about 24 per cent of operating income, recorded an increase of 22 per cent y-o-y.
Meanwhile, both automobile financing’s and motorcycle easy payment’s operating income also advanced higher, it added.
The group’s earnings were moderated by higher overall operating expenses as it increased 14 per cent y-o-y.
“We note that the increase was primarily driven by impairment provision on receivables along with net addition of staff, which led to higher operational costs.
“Moving forward, we expect operational expenses to be stable due to management’s initiatives to drive down cost. Key to achieving this will be its value chain transformation where paperless transaction will be a primary focus for providing future services.”
“We believe this will lead to leaner operation and improved turnaround time.”
Given that the results came in within expectations, MIDF Research maintained its earnings estimates for AEON Credit’s FY18 and FY19 respectively.