Aeon stores profit takes a hit
New accounting standards and subdued consumer sentiment is set to hit Aeon stores profit for the half year.
Aeon Stores Hong Kong MD Isei Nakagawa has revealed a major impact on the group’s financial performance caused by the January 1 implementation of a new accounting standard.
The new Hong Kong Financial Reporting Standard 16 Leases (“HKFRS 16”), which replaced the Hong Kong Accounting Standard 17 Leases (“HKAS 17”) has caused the group’s lease expenses, as recognised in its financial statements, to become higher.
The group’s performance was also affected by a downturn in both Hong Kong’s and Mainland China’s economies, impacting consumption and retail sentiment.
Aeon’s financial results for the past six months are likely to show a “significant” increase in losses compared to last years’ figures.
The audited financials for the period in question are expected to be released next month.