KUALA LUMPUR (Feb 26): Information and communications technology (ICT) products distributor VSTECS Bhd’s (KL:VSTECS) net profit fell 11.4% to RM21.43 million for its fourth quarter ended Dec 31, 2024 (4QFY2024) from RM24.2 million a year ago, dragged by higher operating expenses, and a higher effective tax rate as tax credits were recognised in 4QFY2023.

Revenue for the quarter, however, rose 1.5% to RM819.2 million from RM807.2 million in 4QFy2023, on higher sales from ICT distribution. Gross profit increased by 13.5% to RM47.9 million from RM42.2 million a year ago.

VSTECS declared a second interim dividend of 4.1 sen per share and a special dividend of 0.8 sen per share, payable on May 13. This brings total dividends for FY2024 to 7.7 sen per share, representing a payout ratio of 39%, up from 6.6 sen in FY2023.

For the full year FY2024, the group’s net profit increased 4.7% to a record RM70.57 million from RM67.43 million in the previous year, as its revenue rose 6.4% to RM2.9 billion from RM2.73 billion in FY2023.

On prospects, VSTECS chief executive officer Soong Jan Hsung said the group is confident in the opportunities ahead, driven by the relentless pace of digital adoption, expanding artificial intelligence (AI) applications, and rising demand for next-generation technologies.

Specifically, the ICT distribution segment's momentum is expected to continue, driven by AI-enabled notebooks, next-gen smartphones, and new product launches, meeting consumer demand for advanced technology.

He also anticipates a rebound in the enterprise systems segment in 2025 as public sector projects are expected to gain traction.

"Enterprises are ramping up investments in AI, data centres, and digital transformation initiatives, presenting new opportunities for infrastructure deployments and solution offerings."

Its ICT services segment is also set for growth due to increased cloud adoption, cybersecurity advancements, and demand for IT services, resulting in stronger recurring revenue amid accelerated digital transformation, he added.

“Looking at the traction across all segments, 2025 is set to be an exciting year for us. The groundwork we have laid over the years is now driving tangible results,” said Soong.

Shares of VSTECS closed up 12 sen or 3.6% at RM3.43 on Wednesday, giving it a market capitalisation of RM1.24 billion. The stock has fallen 15.1% year to date.