By NUR HAZIQAH A MALEK
VSTECS Bhd posted a 40.8% increase in net profit year-on-year (YoY) at RM9.89 million on higher sales and revenue.
The group’s revenue for the quarter stood at RM563.9 million against the previous RM448.82 million, despite sales being affected in June 2021 due to high demand for work-from-home products in April and May 2021.
Group CEO Soong Jan Hsung said the group’s results were commendable despite lockdown restrictions which caused a temporary closure of retailers’ physical stores from mid-May up to July 2021.
“We view this as a minor setback for our ICT distribution segment and with the progress of the national vaccination rate, we are optimistic of improved economic sentiments.
“We expect an increase in buying momentum from pent-up demand during the lockdown period,” he said in a statement yesterday.
He added that the group is confident the enterprise systems segment will continue to drive growth moving forward.
Business challenges raised by the pan-demic have hastened the adoption of digitalisation and organisations have adapted accordingly to the new normal.
“This has proven to be an opportunity for the cloud market, where a surge of cloud services adoption was seen across diverse industries to enable a seamless online workforce and business continuity,” he said.
He added that in preparation for the surge in global end-user spending on public cloud services, the group has invested into the segment for the opportunities.
“We have invested into cloud business opportunities to drive public cloud adoption in Malaysia and we expect positive contributions by early 2022.
“The ICT services segment which supports the enterprise segment is also expected to grow in tandem,” he said.
Due to this, VSTECS’s gross profit increased by 29.7% YoY to RM29.2 million from RM22.5 million.
Two of its business segments posted increases, namely the ICT distribution and enterprise systems by 22.3% and 33.8% respectively, while it’s ICT services posted a decline in revenue.
Year-to-date (YTD), the group’s net profit increased by 63.8% YoY to RM22.62 million while revenue hit RM1.23 billion versus RM821.49 million previously.
VSTECS remains cautious on its outlook for the second half of 2021.
“Since the national lockdown on most businesses except for essential services in May 2021, ICT retailers were finally allowed to reopen their physical stores on July 16.
“Although the retail business has restarted slowly, we are confident demand of ICT consumer products will continue to grow for work as well as leisure,” its filing to Bursa Malaysia yesterday stated.
It added that the rising trend for online purchases has increased its e-commerce revenue.
The current lockdown has delayed several enterprise systems projects and implementations in the private and public sectors.
Many businesses are still not allowed to resume their operations in the Klang Valley and VSTECS expects some commercial projects to be postponed or cancelled.
It added the continued daily high Covid- 19 cases and the impending change of the government have resulted in poor market sentiment and business confidence.
“However, the significant increase in vaccine rollout to the population recently has brought some optimism to reducing the infection rate in the future,” it said.
The group’s board of directors has declared a single-tier interim dividend of 1.5 sen per ordinary share each for the financial year ending Dec 31, 2021, which will be paid on Oct 27, in respect of deposited securities as of Sept 30.