KUALA LUMPUR: VS industry Bhd said its performance in the second half of financial year ending July 31, 2019 (FY19) won't be as bad as it had earlier expected on improved order pipeline visibility.
The electronics manufacturing services (EMS) firm today reported a 14.2% drop in net profit to RM37.9mil, as revenue decline 12% to RM982.6mil.
Cumulative six-month earnings stood at RM77.7mil compared with RM87.1mil made a year earlier.
The company, in December, had warned that its profit growth will be softer this year.
"Based on the latest order pipeline visibility, the impact appears to be less austere than initially thought, as we have since received additional orders for a particular product and this would partially cushion the moderation in orders," it said in a filing with Bursa Malaysia today.
VS Industry reiterated that its financial performance in the second half of FY19 will be affected lower orders from a key customer.
"The temporary moderation in orders has not in any way detracted the group from its focus to grow the business," it said.
VS Industry said the US-China trade war has opened up many opportunities for the group as various MNC brands are seriously considering relocating their manufacturing base to Southeast Asia.
"In response, concerted efforts have been put in by the group with the establishment of a special business development taskforce to pursue these opportunities," it said.
The company, last month, has secured a contract with Bissell International Trading Company.
"We are confident that Bissell has high potential to be a key customer in future," it said.
Earnings from this new customer would start contributing to the group from financial year ending July 31, 2020 (FY20) onwards.