KUALA LUMPUR (March 26): VS Industry Bhd (KL:VS) slipped into the red for the second quarter ended Jan 31, 2026 (2QFY2026), with a net loss of RM29.59 million, compared to a net profit of RM15.38 million in the year before.

The loss was due to lower orders from key customers arising from soft consumer sentiments globally, which in turn affected the overall utilisation rate of production capacity coupled with cost optimisation initiatives from customers, said the group in a bourse filing on Thursday.

Two quarters ago, the group had incurred a net loss of RM33.04 million in 4QFY2025, on the back of a revenue of RM858.79 million.

Quarterly revenue fell 15.32% to RM769.53 million in 2QFY2026, from RM908.8 million a year ago.

No dividends were declared during the quarter.

For the first half of FY2026 (1HFY2026), its net profit stood at RM1.04 million, a 97.73% drop from RM45.98 million in 1HFY2025, as revenue declined by 8.49% to RM1.85 billion, from RM2.02 billion during the same period.

 Looking ahead, the group anticipates its performance for this current financial year (FY2026) to be weaker than the preceding year given how the operating environment has turned out to be “very challenging”.

The group said the US court rulings on the global tariffs have once again clouded the trade outlook and introduced fresh uncertainities for export-oriented manufacturers, despite being lower tariffs.

This has made forward planning and order visibility more difficult, as customers reassess their sourcing and procurement strategies, it said.

“Compounding this is the weak consumer sentiment and spending globally, which have dampened demand for consumer electronics, a key end-market for the group,” it added.

VS Industry further said the situation is further aggravated by the recent escalation of geopolitical tensions in the Middle East, where conflicts involving Iran and Gulf countries have heightened global risk aversion and added to supply chain uncertainties.

Meanwhile, the strengthening of the ringgit against the US dollar is unfavourable on the group's financial performance as well, it noted.  

Notwithstanding this, the group said it remains committed to lean production, stringent cost control, and enhancing operational efficiency across all its facilities.

On a positive note, the group continues to be supported by a solid balance sheet with healthy cash liquidity, which provides the financial resilience to navigate the current headwinds.

As at end-Jan 31, 2026, VS Industry’s cash and cash equivalents totalled to RM711.9 million, while its total borrowings stood at RM542 million.

Shares in VS Industry closed unchanged at 28.5 sen on Thursday, valuing the group at RM1.13 billion. Over the past one year, the stock has fallen 68%.