VSTECS to broaden its consumer market to manage pandemic risks

by SHAHEERA AZNAM SHAH / pic credit: vstecs.com.my

VSTECS Bhd plans to broaden its consumer market in the information and communication technology (ICT) sector by focusing on the lifestyle and Internet of Things products to reduce risk of losses amid the Covid-19 pandemic.

The group said the likelihood of extended Conditional Movement Control Order (CMCO) and Enhanced MCO could gravely impact the market sentiment.

In its third quarter ended Sept 30, 2020 (3Q20), VSTECS made a net profit of RM10.1 million, a 22.26% increase from RM8.26 million recorded last year on high demand for work-from-home products for employees during the movement restriction period.

Revenue for the quarter also rose 16.7% to RM536.37 million from RM459.57 million.

The group also recorded higher revenue contributions from all of its business segments with the ICT distribution seeing a 21.2% increase to RM375.5 million, mainly on the higher sales of notebooks, phones and printers which are essentials for the working from home arrangement.

Its enterprise systems segment posted a revenue of RM139.5 million, an increase of 2.9% year-on-year, while its ICT services segment grew by 49.3% to RM21.4 million.

VSTECS declared an interim dividend of 2.5 sen per share, payable on Dec 16, 2020.

CEO Soong Jan Hsung said the group is working closely with its brand principles to improve the supply of ICT products to serve the demand of the workforce mobility essentials.

“In 3Q, consumer spending on ICT products continued to do well due to the buying trends of the work-from-home and workforce mobility requirements.

“This resulted in an increase in sales volume and we could have done better if not for the supply constraints in fulfilling market demand,” he stated in a release yesterday.

He added that some targeted key projects in the public sector under the group’s enterprise systems segment were delayed due to the lockdown, deferring their implementation timelines.

“We aim to be able to catch up and deliver projects as soon as the situation stabilises.

“Corporations will continue to invest in upgrading their systems and infrastructure in the long term to enhance business productivity and we expect the enterprise segment to continue flourishing,” he said.

He added that VSTECS’ ICT services segment, which plays the supporting role to the group’s enterprise segment, has demonstrated encouraging momentum and has the potential to further grow and expand the group’s margins.

Soong stated that the group plans to widen its e-commerce reach by representing more official online brands beginning 2021.