VS Industry expects new client to help drive business recovery

by SHAZNI ONG / pic credit: vs-i.com

VS INDUSTRY Bhd’s earnings fell 3.81% year-on-year (YoY) to RM54.12 million for the fourth quarter ended July 31, 2020, due to lower contribution from its Malaysia and Indonesia segments.

The industrial mold manufacturing company, however, saw its profit before tax grew by 45.7% or RM22.4 million to RM71.3 million over the same period, notwithstanding revenue for the quarter falling 14.98% YoY to RM882.61 million.

“The improved earnings for the current quarter despite the decrease in revenue were mainly attributable to much smaller losses from the operations in China following restructuring and streamlining of operations by adopting an asset-light and lower-cost model,” the company said in a Bursa filing yesterday.

VS Industry declared a second interim dividend of 0.8 sen per share for the financial year ended July 31, 2020, (FY20) payable on Oct 20, 2020, as well as proposed a final dividend of 0.8 sen for FY20.

The total dividend per share for the current financial year is 2.6 sen. For the cumulative 12 months, earnings slipped 29.95% YoY to RM115.86 million, while revenue fell 18.48% YoY to RM3.98 billion.

Earnings for the cumulative quarters fell mainly due to losses of RM26.9 million incurred during the temporary closure of factories following the Movement Control Order and due to lower orders from key customer.

VS Industry noted that the operating environment has been very difficult, but orders from existing customers are showing a healthy rebound compared to the preceding quarter.

MD Datuk SY Gan said the US-China trade tension continues to open up opportunities for VS Industry as it clinched a new customer — Victory Innovations Co from the US in August 2020 to produce cordless electrostatic sprayers on a box-build assembly basis.

“There is a substantial spike in demand for these sprayers for disinfection purposes, which is expected to last in the foreseeable future due to the need to disinfect surfaces in the current pandemic situation,” he said.

VS Industry closed 2.86% or six sen higher at RM2.16 yesterday, valuing the company at RM4.06 billion.