Analysts wary of elevated ringgitUS dollar exchange rate eating into Amway’s earnings
KUCHING: Analysts are still wary of the elevated ringgitUS dollar exchange rate eating into Amway (M) Holdings Bhd’s (Amway) earnings.
To note, Amway’s first nine months of financial year 2022 (9MFY22) profit after tax and minority interests (PATAMI) beat both the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) and consensus expectations, accounting for 90.2 per cent and 96.8 per cent of respective fullyear forecasts.
“We believe the positive deviation came from better-thanexpected margin resilience from cost consolidation and better product mix,” Kenanga Research said.
The announced dividend of five sen brought the total up to 15 sen, in line with the research arm’s expectations as the group normally pays out a larger dividend at the year-end.
“Looking forward, the group remains cautiously optimistic in maintaining its top-line around FY21 level.
“However, we remain wary of the elevated ringgit-US dollar exchange rate eating into earnings.
“While performance so far has been encouraging, but if the effect of the poor exchange rate is lagged due to hedging, there may be a window of weakness during 1HFY23.
“Conversely, global supply chain disruptions are expected to ease going into FY23.
“This could spell out lower costs for the group which imports its products from its US headquarters.”