PETALING JAYA: VS Industry Bhd’s net profit for its fourth quarter ended July 31, dropped 3.8% to RM54.12 million from RM56.26 million a year ago due to higher tax expense and higher foreign currency translation differences for foreign operations.
For the current quarter under review, the group recorded a revenue of RM882.61 million, a decrease of 15% as compared to the previous year corresponding quarter’s revenue of RM1.04 billion.
For the full year period (FY20), its net profit fell 29.9% to RM115.86 million from RM165.39 million mainly due to losses of RM26.9 million incurred during the temporary closure of factories following the movement control order that was imposed in the preceding quarter, in addition to lower orders from a key customer.
The group recorded a revenue of RM3.24 billion, a decrease of 18.5% as compared to RM3.98 billion recorded in the preceding year.
A second interim dividend of 0.8 sen per share was declared yesterday for FY20 and will be paid on Oct 30, 2020. The total dividend per share for the current financial year is 2.6 sen (from 4.4 sen in previous year corresponding period).
VS said the operating environment has been very difficult during the current financial year, particularly during the third quarter. Amid a decelerating global economy plagued by uncertainties arising from the slowdown in global economy, the world is facing unprecedented challenges brought forth by the Covid-19 pandemic.
“On a positive note, however, despite the challenging situation, the group managed to clinch another new customer from the US in August 2020 to produce cordless electrostatic sprayers on box-build assembly basis. The addition of this new customer is a further testament to the group’s capability and track record,” VS said.
Meanwhile, orders from existing customers are showing fairly healthy rebound as well by comparison to the preceding quarter. Additionally, the group will also be producing new models that some customers plan to roll out in 2021.
The encouraging trend is expected to sustain in the near future. With this, the group’s existing capacity is projected to be filled up by 2021. In preparation for future expansion, the group plans to increase its capacity by acquiring new plant. Discussion with prospective customers remain ongoing.
“In view of the progressive developments above, the board opines that the financial performance in the next financial year will be better supported by recovery in global and local economies. The prospects of the group remain bright under the stewardship of the experienced board and management team that is further backed by a strong balance sheet.”
