KUALA LUMPUR: V.S. Industry Bhd's (VSI) net profit dropped 16.7 per cent year-on-year to RM34.57 million for its fourth quarter (Q4) ended July 31, 2022 (FY22) compared to RM41.5 million net profit a year ago.
VSI said this was primarily due to a one-off (non-cash) impairment on the investment in associate and impairment loss on plant and equipment amounting to RM25.8 million and RM12.4 million respectively.
Revenue came in higher at RM1 billion, up 6.7 per cent from RM941.1 million in the corresponding period last year.
For its full financial year, the company's net profit dropped 30.8 per cent YoY to RM169.74 million from RM245.35 million in FY21.
Its revenue was down to RM3.91 billion from RM4 billion last year.
The decline for both net profit and revenue stemmed from the one-off impairment and lower delivery of orders to key customers during the period.
This was due to labour shortage as well as protracted disruption in the global supply chain which affected supply of components.
Furthermore, the company added that mass production for a new key customer had yet to achieve an optimal level.
Managing director Datuk S.Y. Gan said FY22 had been challenging for the company due to the lingering effects of the pandemic and demanding business operating landscape.
"Nevertheless, we are heartened to have delivered a commendable set of results despite the arduous environment.
"Looking ahead, businesses globally are expected to continue grappling with market uncertainties and a slew of issues such as inflationary pressures, rising interest rates as well as recession fears.
"Against this backdrop, consumer sentiments are ebbing with cautious spending likely to prevail," he said in a statement.
He noted there were some bright spots in the company with labour shortages now resolved following the arrival of adequate numbers of foreign workers.
Supply chain and logistics issues were also manageable as the company had stocked up on certain raw materials with longer lead time.
"On balance, all hands are on deck to keep the situation in check while the team continues to fulfil deliveries to customers.
"Besides having an experienced team, our solid balance sheet certainly provides much support and confidence too in navigating through the current headwinds.
"The board opines that the financial performance of the group for the coming fiscal year will be satisfactory barring unforeseen circumstances," he added.
VSI declared a fourth interim dividend of 0.4 sen per share for the quarter under review.
It also proposed a final dividend of 0.4 sen per share, subject to shareholders' approval at the upcoming annual general meeting.
Total dividend per share for the current financial year amounted to 2.0 sen, representing a 44.9 per cent payout based of FY22 earnings per share of 4.45 sen.