KUALA LUMPUR (March 21): VS Industry Bhd’s (KL:VS) net profit fell nearly 4% to RM15.38 million for its second quarter ended Jan 31, 2025 (2QFY2025) from RM16 million a year ago, mainly due to a sharp contraction of foreign exchange (forex) gains, which fell to RM915,000 from RM12.79 million a year earlier.

However, the electronics manufacturing services provider’s gross profit rose 48% to RM75.3 million in 2QFY2025 against RM50.77 million a year ago. Its operating profit came in higher, too, at RM38.1 million, up 14% from RM28.1 million a year ago, according to the company’s filing.  

Quarterly revenue increased by barely 2.8% to RM908.79 million, from RM884.06 million in 2QFY2024.

The company said its earnings growth was primarily driven by the Malaysia segment, whose revenue grew by 23.8%. However, revenue from the Singapore and Indonesian operations declined by 52% and 7.5%, respectively.

For 2QFY2025, the group announced an increased dividend per share of 0.4 sen, compared to 0.3 sen a year ago. This raised the year-to-date declared dividend to 0.8 sen, up from 0.6 sen in the previous year.

For the six months ended Jan 31, 2025 (1HFY2025), VS Industry’s net profit shrank by 29.2% to RM45.98 million, compared to RM64.99 million in the previous year, attributed to reduced sales orders from existing customers in 1QFY2025, higher operating expenses, and unfavourable forex.

Meanwhile, cumulative revenue remained relatively stable at RM2.02 billion.

In a separate statement, managing director Datuk Gan Sem Yam observed that the macroeconomic landscape has faced renewed challenges due to a series of new and proposed tariffs introduced by the current US administration which have intensified global economic uncertainties.

This led VS Industry to adopt a more cautious approach to strategic decisions and operational planning.

Gan highlighted that the customer order flow in Malaysia remains generally healthy, albeit with more cautious order placements. This cautious trend is likely to continue in the coming months. However, he expressed optimism about the anticipated new model launches by certain customers, especially towards the final quarter of the fiscal year.

Regarding the Philippines operations, he noted that the group is awaiting the delivery of machinery to begin production test runs, which are expected to commence within the next two months.

Despite the challenging environment, the group remains optimistic about its long-term outlook, supported by a strong customer base, enhanced vertical integration capabilities, solid financial standing, and prudent management practices.

VS Industry’s shares were up three sen or 3.7% at 84 sen at Friday’s midday break, giving it a market capitalisation of RM3.31 billion. Year-to-date, the stock has fallen 25.7%.