Lower sales, higher import costs hit Amway’s Q1 results

PETALING JAYA: Amway (Malaysia) Holdings Bhd’s net profit for the first quarter ended March 31, 2016 fell 51.01% to RM18.05 million from RM36.84 million a year ago on lower sales and higher import costs.
In a filing with Bursa Malaysia yesterday, the group said higher import costs were primarily due to the weaker ringgit and higher transfer price. It also saw higher sales incentive provisions and operating expenses during the quarter.
Revenue fell 4.98% to RM305.94 million from RM321.99 million a year ago mainly due to a strong buy up in the first quarter of 2015 ahead of the Goods and Services Tax implementation on April 1, 2015.
The group declared a first interim single tier dividend of 5 sen net per share in respect of the financial year ending Dec 31, 2016, to be paid on June 15, 2016.
“The operating environment for the rest of the year remains challenging with the rising cost of importation, mainly driven by the weakening ringgit and the anticipated softness arising from post-price increase,” it said, adding that these factors will negatively affect its operating margin.
The group said that it will continue investing in sales and marketing programme, leveraging on its 40th anniversary and Amway Business Owners experience-related infrastructure.