KUALA LUMPUR (June 19): VS Industry Bhd (KL:VS) said on Friday that its operating environment will remain challenging for the rest of the financial year, after slipping into the red in its latest results. 

The electronic manufacturing services provider posted a net loss of RM32.91 million for the third quarter ended April 30, 2026 (3QFY2026), compared with a net profit of RM23.77 million a year earlier, as revenue fell 11.6% to RM804 million from RM909.42 million. No dividend was declared for the quarter.

In a filing with Bursa Malaysia, the group attributed the weaker performance to lower orders from key customers amid soft global consumer sentiment, which in turn affected production capacity utilisation, alongside customers’ cost optimisation measures.

For the cumulative nine months of FY2026, VS Industry recorded a net loss of RM31.87 million versus a net profit of RM69.75 million a year ago, as revenue declined 9.6% to RM2.65 billion from RM2.93 billion.

While headline tariff rates on Malaysian exports to the US have been revised lower following court rulings, broader trade policy uncertainty persists. The group flagged that the US sector-specific tariff investigations targeting the electronics industry have further clouded the outlook, while supply chain disruptions linked to tensions in the Middle East have added to the uncertainty.

“Demand conditions in the group’s key end-markets have yet to show meaningful recovery. Persistently weak global consumer sentiment has dampened orders from key customers, affecting production utilisation rates. The resultant under-utilisation led to fixed costs not being adequately absorbed, weighing on profitability.

“In the Philippines, utilisation has yet to reach break-even levels required to cover fixed costs. The group continues to focus on ramping up production while keeping costs in check,” it said.

Despite the headwinds, VS Industry said it is cautiously encouraged by early signs of improving order flow heading into the final quarter.

Nonetheless, the group remains focused on lean production, stringent cost control and improving operational efficiency, supported by a solid balance sheet and healthy cash position.

“Taking all factors into consideration, the board expects the group’s performance for the financial year ending July 31, 2026 to be lower than the preceding year,” it added.

At Friday’s noon break, shares of VS Industry were down half a sen or 2.56% at 19 sen, valuing the group at RM750.06 million.