Below expectations. Amway’s FY12/09 net profit of RM72.5m was below our but in line with consensus expectations, accounting for 88% and 95% of our and consensus forecasts respectively. However, Amway’s gross profit level was in line with our expectations (accounting for 99%). The key variances were mainly due to higher-than-expected distribution cost and selling and administrative expenses in 4Q09, which we believe was attributable to the opening of the new headquarters. Qoq, distribution cost and selling and administrative expenses jumped by 21% and 14% respectively. Meanwhile, effective tax rate remains high at 26.6%, due to certain expenses being disallowed for tax purposes. During the quarter, Amway declared a final single-tier dividend of 7 sen, bringing full year FY09 net dividend to 48 sen or net dividend payout of 109%, which is in line with our forecast of 48 sen, translating to net yield of 6.5%.
Amway (M) Holdings Berhad (Malaysia ) : Look Forward To 2010 - 24/02/2010
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