The net profit of Amway (Malaysia) Holdings Bhd decreased by 53.3 percent to RM7.85 million in the second quarter of 2021, compared to RM16.81 million a year earlier.
This was owing to a larger sales incentive and an increase in Amway Business Owner (ABO) related expenditures following increased sales and true-up adjustments, according to a filing with Bursa Malaysia.
However, sales grew 26.7 percent to RM355.91 million from RM280.80 million in the previous quarter, owing to continued strong demand for nutrition and wellness goods as well as home appliances, according to the direct selling firm.
“The Amway Privileged Customer (APC) program and strong field momentum inspired by the newly introduced sales incentive plan launched in January 2021 also contributed to this,” the company stated.
In terms of prospects, Amway expects moderate growth in the second half of the year compared to the previous year’s strong revenue base.
“Overall, the firm aims to generate significant revenue growth for the entire year 2021,” it added.
The firm also stated that it will continue to invest wisely and responsibly in areas such as ABO-centric reward programs, new product launches and promotions, and enhancements to the digital platform and related delivery infrastructure.
“These ongoing expenditures are important for long-term company growth,” Amway said, “but they will put pressure on the group’s operating margin.”
On a transaction of 2,800 shares, Amway’s stock rose 1 sen to RM5.72 at the closing of trading on Bursa Malaysia.