WITH the gradual reopening of the economic system and resumption of enterprise actions, Aeon Co
(M) Bhd is optimistic of its prospects for this yr.
In gentle of the brighter outlook, managing director and chief govt officer Shafie Shamsuddin says Aeon has put aside a capital expenditure of between RM200mil and RM300mil for 2022.
“This will be for the improvement of technology and refurbishment of our current assets like malls and stalls,” he tells StarBizWeek.
“We also have plans to open one new departmental store by October.
“We hope that we can do better than how we did in 2021. With the announcement from the government that there will be no more closures, we are optimistic.
“However, we also need to monitor the Covid situation closely. In January, cases were low and it was a good month. But the cases went up in February and everyone has become more cautious,” he mentioned.
For its monetary yr ended Dec 31, 2021, Aeon’s internet revenue doubled to RM85.3mil from RM41.4mil within the previous yr, pushed by higher margins from improved buying methods and enhanced negotiations, coupled with disciplined price administration.
Revenue in 2021 stood at RM3.63bil in contrast with RM4.05bil within the earlier corresponding interval.
Despite posting greater than a 100% year-on-year surge in earnings final yr, Shafie says 2021 was certainly a tricky interval for the group. “Last year was equally challenging, if not more difficult than 2020. This was mainly because of the total number of days of closures for our non-essential businesses, as it was a lot higher than 2020.”
According to Shafie, non-essential companies had been compelled to close down for 119 days final yr.
“Whether it’s our own retail or partners in our malls, that’s 33% of no business for the year.
“Also, in 2020, the movement control order (MCO) started in March and we still had Chinese New Year festivities to leverage on. But in 2021, the government implemented the MCO 2.0 from January to February.”
Comparatively, sentiment was affected a bit of in a different way in 2021 in contrast with 2020.
“When Covid hit, it was a panic. Last year, it wasn’t so much of a panic anymore. Instead, everyone was more cautious and prudent. People were more concerned about the lingering uncertainties – how long will it be? How will it impact myself, my family or my company?”
To stay sustainable throughout the top of the pandemic final yr, Aeon had labored carefully with all of its stakeholders.
“The Covid pandemic was a crisis for everyone. So we asked ourselves: ‘How can we be more proactive in being sustainable?’
“We have a large ecosystem. So we asked ourselves: ‘How do we leverage it and build synergies with our tenants, partners, consumers and employees?’”
In the midst of a disaster, it was essential for Aeon to have the ability to “reflect, learn and grow”.
“We didn’t want to just focus on surviving ourself. In line with our ‘Aeon Sayap Bagimu’ sustainability initiative, we aimed to support the smaller enterprises, employees and other stakeholders and see if we can grow together.”In 2021, Shafie says Aeon introduced in 400 suppliers comprising small enterprises.
“These suppliers produced around RM135mil worth of sales in a year and they were looking for a platform to sell their products.
“One of the small suppliers that worked with us. In 2019, it was making RM100,000 in sales. By 2021, it grew to RM1.1mil. It is proof that during the pandemic, we can grow if we really put our hands together.”
Additionally, Aeon additionally labored with the medium-sized suppliers.
“For the smaller businesses, their sales will range between RM100,000 and RM1mil, but for the medium-sized ones, they are between RM1mil and RM10mil per year for each supplier.
“We get about 100 of the medium-sized suppliers to help them grow. Their sales grew 40% from 2019 to 2021. We make the comparison with 2019 because it’s pre-pandemic.”
Growing the companies of the suppliers additionally meant that their contributions can be better, based on Shafie.
“The contributions of the medium-sized suppliers have also grown. In the past, they contributed 19% to us. But now, it’s grown to 28%.”
Additionally, Aeon noticed the pandemic as a chance to reskill its workers.
“In the past, we were a bit more rigid in moving our employees to different departments.
“But during the pandemic and having to endure over 100 days of closure, we used it as an opportunity to retrain them because if we do not give them a chance to move, they may risk getting their salaries cut or be made redundant.”
Except for Aeon’s high administration, Shafie says not one of the group’s workers obtained wage cuts throughout the pandemic.
“There were 10 of us (in top management) whose salaries were cut at the beginning of 2020 for about nine months, until the end of 2020.”
Aeon raised the minimal wage for its workers to RM1,500 monthly from RM1,200, efficient Jan 1, this yr.
“Ultimately, between 25% and 30% of our employees benefited from this increase in minimum wage,” he says.
Going ahead, Shafie says Aeon might be seeking to cut back the extent of carbon emissions at its shops nationwide.
“We have started with two malls, namely Aeon Taman Maluri and Aeon Alpha Angle, where we’re installing solar panels.”
The malls will collectively have 17,000 sq m of photo voltaic panels.
“Collectively, the malls will be able to generate a carbon emission reduction of 3,300 tonnes per annum. This is equivalent to driving a car for 13.3 million km, or savings of 1.7 million litres of petrol.”
Shafie says investments for the set up of the panels might be performed with a accomplice.
“The total investments, with our partner, will be RM10mil for the panels for the two malls.
“Aeon Taman Maluri is completed, while Aeon Alpha Angle will be ready in April.”
Aeon is presently finding out the potential of putting in photo voltaic panels in any respect of its malls nationwide.
“We have signed a memorandum of understanding to study the potential of installing solar panels on our 40 other malls and we aim to do it in less than two years,” he mentioned.
