KUALA LUMPUR: VS Industry Bhd's net profit increased 38.7 per cent in the first quarter ended October 31, 2020 to RM66.68 million from RM48.07 million recorded in the same quarter last year.
In a statement today, the electronics manufacturing services (EMS) provider said the highest quarterly net profit recorded for the quarter was attributed to favourable product sales mix in Malaysia stemming from a more diversified clientele.
Revenue in the same quarter decreased 4.6 per cent to RM987.1 million from RM1.03 billion, primarily attributed to lower turnover contribution from China operations.
The company said domestic sales remained the group's anchor topline contributor, accounting for 88.7 per cent or RM873.4 million to Q1 of financial year 2021 revenue while its Indonesia and China operations contributed seven per cent and 4.3 per cent, respectively.
VS managing director Datuk SY Gan said the group has been and will continue to be busy fulfilling customers' orders in the coming quarters.
"This includes several new product models that are in the pipeline for launching in 2021 by our customers.
"Given the above factors, and along with the two new customers we secured in August and October 2020 respectively, we expect our existing capacity to be filled up by 2021," he said.
Gan said the company has acquired land and buildings that will enhance VS' built-up area in Malaysia by 25 per cent, increasing the total floor space to more than two million sq ft.
"This will enable us to cater to the orders from our existing and new customers," he said.
Moving forward, Gan said the company is cognizant of the challenges and uncertainties brought about by the pandemic.
He said however, the situation is expected to improve with continued containment measures adopted by various governments as well as the gradual rollout of vaccines anticipated from early 2021.
He said in view of this, global and local economies are expected to rebound and recover over the next 12 months, along with improved consumer sentiments.
"All in all, the board opines that the group's performance for the remaining quarters will be satisfactory.
"This is underpinned by the encouraging order flow from our customers along with our prudent planning and careful execution," he said.
VS has declared a first interim dividend of 1.2 sen per share for the quarter under review.
