KUALA LUMPUR: VS Industry Bhd’s net profit in the second quarter ended Jan 31, 2020 (2Q20) fell to RM33.20 million from RM37.94 million in the same quarter last year, weighed down by lower sales order from key customers.
Revenue also declined to RM820.33 from RM978.99 a year ago.
In a filing with Bursa Malaysia today, the company said for the current quarter and cumulative quarters, the Malaysian segment recorded a 19.4 per cent and 9.6 per cent decrease in revenue, respectively, due to lower sales orders from key customers.
It said the Indonesian segment registered higher revenue but posted losses before tax of RM1.5 million for the quarter under review compared to profit before tax of RM0.3 million in the preceding year, mainly due to less favourable foreign exchange rate.
As for China’s segment, the current quarter and cumulative quarters also recorded lower revenue as a result of lower sales orders.
“However, losses narrowed significantly for the cumulative quarters due to lower operating expenses incurred following streamlining activities and adoption of an asset-light model with lower gearing structure,” the integrated electronics manufacturing services (EMS) provider said.
Moving forward, the company said the operating environment has been challenging amidst the ongoing US-China trade tension and slowdown in global economy.
It said the COVID-19 outbreak since January 2020, which has now turned pandemic, has further put much dampener on both local and global markets, affecting trade activities and movement of people worldwide.
As a result of the pandemic, supply chain experienced some delays in materials shipment as suppliers in China are now catching up on production since resuming operations in mid-February, the company said.
On the demand side, the company said the outlook for the next few months appears uncertain at this juncture, given the extent and reach of COVID-19
“We anticipated order flow from customers may slow down in the coming quarter(s), which in turn, would affect the financial performance in the second half of current financial year,” it added.