Kuala Lumpur, May 30, 2019
AEON CO. (M) BHD., is cautiously optimistic about the year 2019 as it believes that the government will introduce consumer friendly initiatives that will augur well for the industry despite the uncertainties in economic and business outlook.
The country’s gross domestic growth rate for the year is forecast to be at 4.5% (based on Morgan Stanley). There are concerns on increase in cost of living, higher cost of doing business and rising global trade conflict that still pose challenges to the retail industry.
In an effort to overcome the challenges and ensure the business remain resilient and sustainable, AEON is committed towards innovating customers’ shopping experiences by employing marketing and pricing strategies; quality customer services; merchandise assortment reformation; refurbishment of selected stores; proper facilities maintenance and operational efficiency.
AEON will continue to refurbish selected stores. The company has recently completed the refurbishment of AEON Bandar Utama’s departmental store levels, this was following the successful renovation of its foodline division end of 2018. The company will continue its expansion selectively, especially in the new business categories of pharmacy and flat price shops.
On the property management services, AEON expects the occupancy and rental rates to remain challenging. Hence, AEON will continue to leverage on this competitive strengths, innovate and offer creative concepts to drive footfalls to the malls. AEON will strive to provide destination malls that have a good tenant mix, which offers merchandise selling and interactive activities for shoppers from all walks of life as they enjoy experiential shopping.
AEON closed the financial year ended the year 2018 by recording a total revenue of RM4.354 billion, which represented an increase of 5.6% as compared to the previous corresponding year of RM4.123 billion. This was due to the earnings derived from the opening of new stores and malls as well as contribution from stores that were renovated in an effort to enhance experiential shopping to match evolving consumer expectations.
The Company’s profit before tax for the year of RM187.0 million was, however 3.5% lower than the previous financial year of RM193.8 million mainly due to previous year’s profit before tax had included a gain on disposal of a mall amounting to RM18.5 million. Excluding this gain on disposal and also share of the associate’s operating losses and impairment losses in both years, the profit before tax for the year under review recorded 3.1% higher growth over the previous year.
At net profit level, the Company achieved a marginally better profit after tax of RM105.1 million for the year under review as compared to the previous year of RM105.0 million.
Retail industry was impacted by the eventful year and witnessed transformative changes as the industry consolidated and adjusted to the changing customers’ behavior and lifestyles. The rise in digital commerce and modernization of retailing formats continued to provide dynamic trend changes. AEON’s retailing segment registered a growth at RM3.666 billion, 6% higher as compared to the RM3.459 billion recorded in the preceding year. This was attributed by the opening of new stores and the contributions from the renovated stores. The property management services recorded a revenue of RM687.3 million, a growth of 3.5% over the previous financial year of RM664.4 million. This was mainly due to the contributions from the new mall openings. Commenting about the financial performance, YBhg Datuk Iskandar added, “The year 2018 was a year filled with challenges which impacted the consumer sentiments. Despite these challenges, we were able to record an impressive growth. This reflects our positive strategic move to maintain a good balance between pursuing growth and stability despite the challenging environment and to improve customer shopping experiences.”