PETALING JAYA: Aeon Co (M) Bhd is optimistic that revenue for its current financial year ending Dec 31, 2021, will be able to match or surpass its 2020 performance.

       Managing director Shafie Shamsuddin (file pic) said much will depend on the speed of the nationwide vaccination programme and how soon malls will be able to open.

       “Compared with last year, the circumstances that we’re facing this year are a lot more challenging.

       “However, we’re hopeful that with the vaccinations and the adaptability we’re doing, we can match, if not surpass last year’s sales performance, ” he said during a virtual press conference after the group’s AGM.

       Shafie is hopeful that the number of daily Covid-19 infections can be brought down quickly, so that the lockdown will be lifted as soon as possible.

       Nevertheless, he said Aeon had gotten off to a good start to the year.

       “We believe we can adapt to the challenging circumstances as shown in our first-quarter results, ” he said.

       Aeon’s net profit jumped almost three-fold to RM22.03mil for the first quarter ended March 31, 2021, from RM7.47mil in the corresponding quarter last year. Revenue in the first quarter stood at RM1.01bil compared with RM1.19bil a year earlier.

       In its notes accompanying its first-quarter results, Aeon said the higher earnings came on the back of the company’s agile, entrepreneurial and “genba” approach to respond to the Covid-19 pandemic, which resulted in improvements in merchandise gross margin, changes to marketing mechanics and sustainable cost reduction structures.

       Aeon Kinta city Mall (File pic)

       Additionally, Shafie said Aeon is well diversified, pointing out that the retail segment is not the group’s only revenue generator.

       “At the moment, around 85% of revenue comes from retail, while 15% is from property. But in terms of profitability, it’s the reverse, where 80% comes from property and 20% from retail.

       “While other players either only have retail or property as their core business, we have a good balance, ” he said.

       Separately, Shafie said Aeon will be allocating capital expenditure (capex) of RM251mil for 2021 to ramp up its online systems and refurbish its outlets.

       He said 40% of its annual capex will be for technology and information technology systems.

       “The balance will be for renovations and maintenance, as well as remodeling of our stores. We’re looking at 13 new specialist stores that we are bringing up this year, ” he said.

       Shafie said Aeon is targeting at least 2% of revenue for this year to come from its e-commerce business.

       “In five years, we expect it to grow to 15%. Last month, ahead of the full movement control order where there was a lot of panic buying, contribution from e-commerce rose to 7%.

       “So we know we have the capacity to grow our e-commerce business (to double digits), going forward, ” he said.