Electronics Manufacturing Services provider, V.S. Industry Berhad has announced its second quarter (2QFY22) and first half financial results for the period ended 31 January 2022 (1HFY22).
For the quarter under review, the Group’s revenue rose 1.5% YoY to RM1.01 billion as compared to RM999.3 million a year ago. Meanwhile, 2QFY22 net profit after tax and non-controlling interest declined 30.3% YoY to RM44.5 million versus RM63.8 million in the previous year corresponding quarter. This was primarily due to the challenges faced by its operations in Malaysia and China.
The company’s Malaysia segment was affected by a combination of factors that included 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 optimal level. These, along with worker shortage issue and disruptions to supply chain, particularly the component shortage, had led to lower operational efficiency. Over in China, the difficult operating landscape persisted with the segment continued to incur losses as the lower revenue base was insufficient to cover the fixed cost.
On a brighter note, 2QFY22 revenue improved 4.8% QoQ to RM1.01 billion from RM968.0 million in the immediate preceding quarter. Net profit too, jumped 12.9% QoQ to RM44.5 million from RM39.4 million in 1QFY22. The improvement was chiefly attributed to an increase in revenue coupled with the absence of one-off setup cost for the Industrial Vaccination Centre (PPVIN) and the vaccination expenses for the entire workforce incurred in 1QFY22.
“Looking at the bright side though, overall demand by customers remains strong and is largely expected to sustain in the coming quarters. Mass production for the new key customer is expected to ramp up once labour sufficiency issue is resolved. Efforts are ongoing to step up hiring of locals following the ban on bringing in foreign workers since 2020. On a related note, we hope the labour situation will gradually improve in tandem with the reopening of the Malaysian borders,” Datuk S.Y. Gan, Managing Director said.
Cumulatively, 1HFY22 revenue slipped 0.2% YoY to RM1.98 billion while net profit stood at RM83.9 million versus RM130.5 million a year ago.
The company’s balance sheet continued to be healthy with negligible net gearing as at end-January 2022. Gross cash holdings stood at RM250.1 million and backed by net assets of RM0.55 per share.
The Board has declared a second interim dividend of 0.4 sen per share for the quarter. The total dividend per share declared for the current financial period is 0.8 sen.
