AEON: Retailer Achieves Half-Year Stability as Property Management Services Cushion Festive Drag

A major retailer has reported a stable performance for the first half of fiscal year 2025 (1HFY25), largely supported by the resilience of its Property Management Services (PMS) division. This helped mitigate softer retail sales influenced by festive timing differences in the second quarter. The company’s 2QFY25 results were in line with expectations, according to TA Securities.

Performance Review

For the second quarter of fiscal year 2025 (2QFY25), the company recorded revenue of RM999.6 million, a 2.1% decrease year-on-year (YoY). Core PATANCI (profit after tax and non-controlling interest) saw a more significant decline, contracting by 50.6% YoY to RM13.3 million. This softer quarterly performance was primarily attributed to shifts in festive spending, which benefited 1QFY25 with the overlap of Chinese New Year and Hari Raya festivities, unlike 2QFY24 which saw festive-driven sales.

Despite the quarterly dip, the cumulative 1HFY25 performance demonstrated stability. Revenue for the first half increased by 2.6% YoY to RM2.24 billion, underpinned by steady retail sales growth of 1.6% YoY. Core PATANCI for 1HFY25 stood at RM82.6 million, a marginal 2.6% decline YoY, broadly stable compared to the previous year.

Drivers and Challenges

The company’s Property Management Services (PMS) division emerged as a crucial anchor for earnings stability. PMS revenue grew robustly, rising 5.5% YoY in 2QFY25 and a stronger 7.4% YoY in 1HFY25. This growth was driven by higher occupancy rates and effective rental renewals, successfully cushioning the impact of weaker retail sales.

The retail segment faced headwinds in 2FY25, with revenue declining 3.8% YoY. Beyond the festive timing effect, a high fixed cost structure also exerted pressure on margins. This resulted in a sharp sequential normalisation of core net profit from 1QFY25’s exceptional festive-driven earnings.

Future Outlook

TA Securities maintains a positive outlook on the company’s prospects, citing resilient consumer spending and ongoing government measures designed to sustain household demand. The PMS division is expected to continue its role in anchoring earnings through firm occupancy and rental renewals.

The company is also pursuing strategic priorities to foster long-term growth and enhance customer engagement. These initiatives include the expansion of private brands, enhancement of loyalty programmes, digital initiatives, and ongoing mall refurbishments. These efforts are expected to deepen customer relationships and reinforce the company’s market position.