Vstecs’ IQ2023 net profit increases 25% to RM14.8 million

KUALA LUMPUR: Vstecs Bhd, Malaysia’s Information & Communications Technology (ICT) distributor, posted a revenue of RM664.7 million in 1Q FY2023, marking a 3.3% growth compared to the corresponding period of the preceding year (1Q FY2022) when revenue stood at RM643.8 million.

The Enterprise Systems and ICT Services segments registered revenue increase of 30.6% and 39.7%, respectively. This growth underscores the ongoing upward trend in enterprise spending on infrastructure and digital transformation, as businesses recognise the critical role of technology in maintaining competitiveness in today’s business landscape.

Releasing its first quarter financial results for the three months ended March 31, 2023 (Q1’23) today, Vstecs in a statement said the ICT Distribution segment however experienced a revenue decline of 25.2% compared to 1Q’22, reflecting consumers’ heightened caution towards discretionary spending.

Despite this, Vstecs remains focused on adapting to market dynamics and meeting evolving consumer demands.

During the quarter, profit after tax (PAT) grew by 25.0% to reach RM14.8 million, outpacing the revenue growth. The result can be attributed to the higher profit margin contribution from the Enterprise Systems and ICT Services segments.

Vstecs CEO JH Soong said, “We are witnessing a significant increase in enterprise spending on technology, and anticipate this trend to extend

well beyond 2023. As technology continues to evolve, we have a vast runway ahead of us, with plentiful opportunities to support the digital transformation journey of enterprises in both the public and private sectors. Organisations are actively recognising the importance of

upgrading legacy systems and embracing transformative technologies like cloud computing and artificial intelligence to remain competitive in today’s digital landscape.

In line with Malaysia’s emergence as a prominent regional data centre hub, he added they recently secured several distributorships for data centre power solutions and these will complement their existing data centre offerings, enabling them to deliver a comprehensive value proposition and serve evolving market needs.

“The ICT Services segment will trace the growth trajectory of the enterprise segment. Our investments into cloud services over the past two years will make a positive contribution in 2023, with further growth expected in the near future. We are also growing the maintenance and managed services under this segment to increase recurring revenue and provide further earnings visibility for our group. We are currently finalising several new data centre and cloud related projects, and hope to announce some positive news soon,” he said.