Again a record performance for Aeon

Japanese retailer Aeon Co Ltd said its operating profit hit an all-time high in the fiscal year ended in February largely due to a turnaround in its supermarket business. Also strong contributions from its subsidiaries, such as shopping malls, along with its expansion strategy added to the retailer’s performance.

In the past fiscal year, operating profit stood at 189.73 bln yen (US$1.6bn), up 14 per cent compared to the previous year. This was the seventh straight fiscal year that the retailer has posted record operating profits. Sales grew 8.9 per cent to a record 4.82 trln yen (US$40.5bn), after same-store sales at Jusco stores rose 0.2 pct in the last fiscal year, the first increase in 11 years.

Aeon's net profit nearly doubled to 57.66 bln yen (US$485mn). The growth at the net level was more pronounced than the growth at the top-line due to a decline in balance sheet restructuring costs, Aeon said. In the previous year (ending February 2006), Aeon spent 83.3 bln yen (US$700mn) to write down impaired assets, mostly supermarket stores, but similar writedown costs in the fiscal year which ended last February came down to just 32.8 bln yen US$276mn).

Aeon also pointed to the strong contribution from key subsidiaries such as Aeon Mall, which operates shopping malls, as well as the MaxValu group. The MaxValu group was the entity formed from the restructuring of the collapsed Yaohan International, which now operates large supermarkets.Aeon also benefited from past structural reforms at its general merchandise store business, which helped lift the overall gross profit margin in this segment to 26.3 pct from 26.0 pct in the previous year.

(Source: AFX)