AEON earmarks RM251m capex for FY21, aims to expand 13 new specialist stores

KUALA LUMPUR (June 23): AEON Co (M) Bhd has allocated RM251 million as capital expenditure (capex) for the year, with 40% of the budgeted amount to be allocated to further strengthen the group’s technology and IT infrastructure, according to the retail group’s managing director Shafie Shamsuddin.

Speaking with the media in a virtual briefing today, Shafie said the balance of the capex will be channelled for renovation, maintenance and remodelling of its malls and stores. 

“We are looking at expanding on 13 new specialist stores this year and to focus on 11 malls to renovate and make rectification,” he said in a virtual meeting after AEON’s 36th annual general meeting (AGM) today.

On the retail business outlook for the rest of the year, Shafie highlighted that most retail businesses are feeling a bigger pinch at the moment due to the implementation of the movement control order (MCO 3.0) as compared to the earlier MCO 1.0 imposed in March last year. 

“We hope to have a better outlook for the rest of the year, but that depends on how fast vaccination will be given to all retailers in Malaysia. 

“To support tenants throughout the MCO, we are also giving them support through waivers of discounts and allow them to pay [the rental] on an instalment basis up to a certain period of time.

“At the same time, we also offer them financing for those who have difficulty to get a loan, and we will link them up to our partners like AEON Credit Service (M) Bhd that can give them financing capabilities,” he said. 

As of April this year, the group operated a total of 43 malls — 28 AEON malls and 15 AEON BiG malls. It also owns speciality store Daiso and pharmacy AEON Wellness. To date, Daiso has 44 stores nationwide, while AEON Wellness has 66 stores throughout the nation. 

Meanwhile, the group has also ventured into e-commerce and is targeting for the segment to achieve a 15% revenue contribution in the next five years. 

“For this year, we are targeting 2% of the revenue contribution from the e-commerce segment,” he stressed. 

In terms of financial performance, for the first quarter ended March 31, 2021 (1QFY21), the retailer’s net profit jumped by nearly threefold to RM22.03 million from RM7.47 million a year ago.

Quarterly revenue, however, fell by 14.89% to RM1.01 billion, from RM1.19 billion previously, due to a decline in revenue, especially from the food line and soft line categories.

At the time of writing today, shares in AEON were unchanged at RM1.34, giving it a market capitalisation of RM1.88 billion. Since the beginning of the year, the stock had risen by 24.07%.

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