VS INDUSTRY BHD MANAGING DIRECTOR GAN SEM YAM.
KUALA LUMPUR: VS Industry Bhd
, whose earnings fell 44% to RM33.5mil in the first quarter (Q1) ended Oct 31, 2016, expects to show stronger results in the second half of the financial year ended July 31, 2017.
The integrated electronics manufacturing services provider said in a statement on Thursday that its board was positive the second-half performance would be much better as sales orders gained momentum, thereby pushing production volume and efficiency to optimal level.
Managing director Datuk SY Gan (pic) said the company would continue to benefit from the sustained strong sales growth of its key clients, notwithstanding the current economic conditions.
“The tangible results from this should be apparent in the second half of our financial year 2017, where we expect to post a stronger set of results. For our Malaysian operations, sales orders are gradually coming in from our key clients, pushing the production volume and efficiency to reach optimal level and we anticipate the respective revenue contribution from some of our key clients to reach new level,” he said.
In announcing its Q1 results to Bursa Malaysia last month, VS Industry said its lower earnings for the quarter was mainly due to high initial start-up cost incurred by the Malaysian operations to prepare for the upcoming substantial box built order anticipated from a key customer for the second half of the financial year.
In the latest statement, it said the group had been busy expanding its production capacity for box-build assembly over the past few months since it was awarded the vertical integration (VI) status by its key UK-based client last year.
“The plan is to increase the box-build capacity to three million sets per annum from the current negligible amount. The first production line is already up and running with more lines scheduled to come on-stream soon,” said VS Industry, which held its AGM on Thursday.
Meanwhile, operations at the facilities in Zhuhai, China, had been picking up pace as well since November 2016, producing a new high-end air purifier model for one of its client there, it noted.
The air purifier model was fully designed by VS Industry and has received “very encouraging response” from end-user consumers during a recent soft-launch event by the client.
VS Industry said its management strived to bring the operations in China back to the black in FY17.
In Q1 FY17, its China segment recorded a higher loss against the preceding year’s corresponding quarter due to lower sales and higher raw materials incurred arising from a weaker yuan against the US dollar.
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