PETALING JAYA: Amway (M) Holdings Bhd expects its profitability to improve this year following investments made earlier to support growth.

       Notably, while the group had reported a 24.15% year-on-year increase in top line to RM392.4mil for the fourth quarter ended Dec 31, 2021, net profit during the quarter fell 80% to RM852,000.

       However, Amway said this is set to improve moving forward as the group expects expenses to normalise.

       “For financial year 2022 (FY22), we are looking at moderate sales growth with improved profitability,” said managing director Mike Duong at its FY21 financial results briefing yesterday.

       “Over the last two years, we have had an explosive growth of the business (due to the pandemic). As we look to FY22, we see this moderating a little bit which is what will lead to moderating sales growth.

       “So the expenses or investments associated with this sales growth will also start to moderate,” Duong added.

       He said the group had made a lot of investments into new back-end systems to support this new growth including in information technology, inventory and home delivery systems.

       “We will see some reductions in these types of investments as we now see it bearing fruit.

       “There will also be a normalisation in costs compared to prior years associated with the Amway Business Owner (ABO) incentives and its awards.

       “The way we do business have now changed from just selling through retail shops, as it is now online and accessible through mobile devices more so than ever before,” he added.

       Amway said the pandemic had seen many people looking for an alternative career, with an emphasis on greater financial security and more flexible working conditions.

       During this period, the group introduced various initiatives to further improve the business journey.

       “These new initiatives, coupled with the strong demand for Amway’s health and wellness products, led to half a million new entrepreneurial ABOs and registered customers sign-ups in 2021.

       “In addition, we see three times increase in the number of early ABOs earning bonus from the sale of products to their customers, as well as more ABOs earning higher recognitions and levels of business success,” Duong said.

       He said Amway’s online orders and home delivery accounts for 60% of its total revenue and this had grown from RM274mil in 2019 to RM956mil in 2021.

       “We will continue to invest in digital solutions for our entrepreneurs and customers while providing an engaging and convenient eCommerce experience,” he said.

       Amway also said it expects the sales incentive plan that was rolled out in prior years to normalise, thereby improving operating margins in FY22 compared to the previous year.