PETALING JAYA: VS Industry Bhd’s net profit slid 12.5% to RM33.2mil for its second quarter ended Jan 31,2020 from RM37.9mil in the corresponding quarter of the preceding year on lower sales orders from key customers.
During the quarter in review, its revenue fell 16.2% to RM820.3mil from RM979mil previously, while earnings per share fell to 1.79 sen from 2.11 sen.
For the cumulative period, the electronics manufacturing services provider saw its net profit rise 4.5% to RM81.3mil from RM77.8mil for the six months to January 2020.
VS Industry said the improved earnings for the cumulative quarters were mainly attributable to much smaller losses from its unit in China following its restructuring and streamlining of operations by adopting an asset-light and lower-cost model.
Its cumulative revenue, however, fell 9.6% to RM1.85bil from RM2.05bil previously. The decrease was due to softer sales orders from its key customers, which led to weaker contribution from its local and China operations.
Managing director Datuk S.Y. Gan said the group’s performance was expected to be lower for the year ending July 31,2020, compared to the preceding year due to the current challenging environment.
“The group is mindful of the challenging market conditions stemming from factors such as the ongoing US-China trade war and Covid-19. The Covid-19 outbreak has now turned pandemic, which has further put dampener on both local and global markets affecting trade activities and movement of people worldwide, ” he said.
“The global supply chains may possibly experience some minor delay in shipment as suppliers in China are now catching up on production since resuming operations in mid-February 2020. As for the demand side, outlook for the next few months appears uncertain at this juncture, ” he added.
Gan said the group anticipated order flow from its customers might slow down in the coming months, given the extent and reach of the Covid-19 pandemic.
Did you find this article insightful?