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VS Industry Q3 net profit slips to RM51.3 mln, declares 0.4 sen dividend

24/06/2022 04:39 PM

KUALA LUMPUR, June 24 (Bernama) -- V.S. Industry Bhd (VS) has posted a net profit of RM51.29 million for the third quarter ended April 30, 2022 (Q3), down from RM73.38 million in the same period a year ago.

Revenue declined to RM927.59 million from RM1.07 billion previously, attributed to lower delivery of orders to key customers due to labour shortage, as well as protracted disruptions in the global supply chain which affected the supply of components, it said in a filing with Bursa Malaysia.

The electronics manufacturing services provider said in a separate statement the local segment continued to be impacted by a combination of factors including an increase in labour and raw materials costs, as well as higher depreciation incurred from new facilities, while mass production for a new key customer has yet to achieve an optimal level.

For the quarter under review, the Indonesia segment recorded lower revenue and profit before tax of RM83.4 million and RM2.4 million respectively, as compared to the same period previously owing to lower sales orders from customers.

The China segment registered a lower revenue in Q3 and cumulative quarters as operations remained under-utilised in the absence of large orders, underpinned by the highly challenging operating landscape in the country.

On prospects, VS said the performance in Indonesia is expected to sustain based on current order visibility, while operations in China will continue to be difficult in the foreseeable future given the strict COVID-19 measures, rising cost environment and lack of large-scale orders.

“Cost management remains a key focus while efforts to secure new customers are still underway,” it said.

Managing director Datuk S.Y. Gan said businesses, including VS, are faced with multifaceted challenges such as inflation, rising labour and materials costs, labour shortage, supply chain, and logistics disruptions.

“We are working hard and implementing necessary measures to ensure operations continue with the least interruptions,” he said.

Besides, he said the group had recently received a new batch of foreign workers, with more to arrive in the coming months and the additional labour force will boost the fulfillment of orders from key customers that have remained robust, including ramping up mass production for a new key customer.

On another note, Gan said the independent review of VS's labour practices by PwC Consulting Associates (M) Sdn Bhd is still ongoing and the results are expected to be ready in the near future.

VS has declared a third interim dividend of 0.4  sen per ordinary share in respect of the financial year ending July 31, 2022, payable on July 29, 2022.


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