Aeon Credit confident of maintaining performance

KUALA LUMPUR: Aeon Credit Service (M) Bhd is confident of maintaining its performance for the financial year ending Feb 28, 2017 (FY17) despite market conditions, said its managing director Kenji Fujita.
“As far as we can see in the economic situation, with the increase of cost in the market and new competition also coming in, maybe market conditions may not be still favourable. So we’ll be very cautious on customer sentiment but we expect we can maintain our performance for this financial year,” he told reporters after its AGM yesterday.
Chairman Datuk Abdullah Mohd Yusof said the company is driven by domestic demand and Bank Negara Malaysia’s forecast of 4-4.5% growth this year is sufficient to fuel the company’s growth going forward.
Aeon Credit Service provides consumer financial services including credit cards, easy payment schemes, personal finance schemes, insurance business and other services.
The company posted RM228.22 million net profit and RM965.23 million revenue for FY16. Its easy payment and personal financing schemes recorded 7.2% annual growth in financing volume to RM2.67 billion in FY16.
CFO and executive director Lee Kit Seong said it hopes to maintain a similar pace of growth for the easy payment and personal financing schemes this year based on market demand and implementation of its business plan.
“Currently there’s demand despite sentiment because we are very much on our own niche market. We might have some customers who are not served by the banks at this moment. Some from the low income group are not served well by the banks so we will have the opportunity to serve them better,” he said.
Lee said it expects to maintain its non-performing loans (NPL) ratio at 2.47% in FY17. Its NPL ratio stood at 2.76% as at February 2015.
Commenting on its dividend policy, Lee said even though it does not have a fixed dividend policy, historically it has managed a dividend payout ratio of between 30% and 38% of net profit.
The company declared a final single-tier dividend payment of 29.6 sen per share, totaling RM42.62 million, resulting in total dividend payout ratio of 37.5% of net profit for FY16. Total dividend for the year was 59.45 sen per share.
Fujita said it plans to expand its branch network this year from 60 to 64 branches, as part of its initiative to serve the market better. The company will invest RM350,000 to RM500,000 per new branch, at Shah Alam, Kota Baru, Sungai Petani and Segamat.
Last year, it opened five new branches in Penang, Perak, Sabah and Sarawak.
Lee said it will also refurbish and upgrade its existing branches as part of its initiative to improve customer service and cost efficiency by digitalising its operations.