VS Industry Berhad announced its first quarter financial results with the group's revenue coming in at RM1.11 billion versus RM1.14 billion a year ago. Meanwhile, 1QFY25 profit after tax and non-controlling interest stood at RM30.6 million vis-à-vis RM49 million in the prior year.
The group said the decline was due to softer sales orders from existing customers coupled with unfavourable foreign exchange movements and higher labour costs following an increase in headcount.
Managing Director of VS, Datuk S.Y. Gan said, "The global macroeconomic environment continues to improve, with the 2nd interest rate cut in the United States ("US") in November 2024 providing further stimulus to businesses and enhancing consumer sentiment."
"For our operations in Malaysia, sales orders remain strong and on an upward trend, in line with recovery in demand as well as new model launches from our key customers. In addition, we are also pleased to share that the group has secured another two new models from a key customer, which are slated for production commencement in the first quarter of 2025."
"In the Philippines, renovation work for our newly established facility is progressing as planned, with completion expected within the next two months. Thereafter, test runs shall commence with two product models that are already confirmed for production. To recap, VS has adopted an asset-light strategy in the country, which involves renting factory space to enable swifter setup time, optimise capital expenditure and maintain agility in addressing market demands."
"Meanwhile, our enhanced vertical integration capabilities enable us to explore additional collaborations with our existing key customers, ensuring continued growth and value creation. Premised on the abovementioned developments, the Board remains positive about the Group's outlook and financial performance in the current fiscal year barring unforeseen circumstances," Datuk S.Y. Gan further added.
The Group's financial position remained with low net gearing of 0.11x as at end-October 2024, supported by net assets of RM0.59 sen per share and gross cash holdings of RM697.5 million. In line with its quarterly dividend payout practice, the Board has a first interim dividend of 0.4 per share for the quarter under review.
