Amway Malaysia posts higher revenue amidst soft consumer sentiments

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Video grab of Mike Duong, Executive Director, AMWAY Malaysia

Bursa Malaysia Main Market-listed Amway (Malaysia) Holdings Berhad (AMWAY Malaysia) today reported revenue of RM252.1 million for the second quarter of its 2017 financial year (2QFY17) which ended 30 June 2017.

This represents an increase of 6.3% compared to the preceding first quarter of 2017 (1QFY17) at RM237.2 million. 

“This is due to positive momentum towards the company’s sales and marketing programmes to sustain ABO momentum,” said a media release from the company.

The Group also recorded better profit before tax of RM19.9 million in 2QFY17, an increased by 49.6% compared to the preceding quarter’s (1QFY17) profit of RM13.3 million mainly due to higher sales and lower operating expenses in the period under review.

“The Group’s revenue has shown a general decline for the first six months, in light of the soft consumer sentiments. Profit was lower due to lower sales and higher import costs, primarily caused by the weaker Ringgit and higher product price,” said Mr. Martin Liou, Managing Director, AMWAY Malaysia.

Comparison with 2QFY16

In comparison to the same period last year, the Group’s revenue saw a decline of 6.3% from RM268.8 million. However, the Group’s profit before tax for the period under review saw an increase from RM9.9 million in 2QFY16 to RM19.9 million in 2QFY17. This is due to lower provisions for sales incentives and lower operating expenses.

Comparison with 1HFY16

For the first six months ended 30 June, 2017 (1HFY17), the Group revenue was RM489.2 million, a 14.9% lower than the same period last year with revenue of RM574.8 million. The Group’s profit before tax for the period under review also saw minor decrease by 4.5% compared to the same period last year with RM33.2 million in 1HFY17 and RM34.8 million recorded in 1HFY16 respectively.

Prospects in 2HFY17

The Board expects the operating environment for the second half of 2017 (2HFY17) to remain challenging due to the soft economic landscape arising from weak sentiment among consumers while foreign exchange impact continues to exert pressure on our margins.

Mr. Mike Duong, Executive Director, AMWAY Malaysia noted, “The Group’s strong 2QFY17 offset 1QFY17 results, led to an overall slight improvement. However, for the rest of the year, forex will continue to put pressure on us. At the same time, we foresee the challenge from soft consumer sentiments to remain.

“To mitigate these factors, we will continue to proactively focus on strategies to effectively manage our operating costs to offset pressure on profitability. We will also continue to implement various sales and marketing activities, as well as ABO experience-related infrastructure to support the ABO’s businesses.”

AMWAY Malaysia declared a second interim single-tier dividend of 5.0 sen net per share in the quarter.