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VS (6963) V.S INDUSTRY BHD posts record FY21 net profit of RM245.3mil

KUALA LUMPUR: VS Industry Bhd posted a record-high net profit of RM245.34mil in the financial year ended July 31, 2021, which was more than double the net profit of RM116.48mil recorded the year before.

"This was parallel with the top-line improvement while the larger-than-proportionate rise in profitability was due to favourable product sales mix in Malaysia stemming from a more diversified clientele, turnaround in performance from Indonesia as well as much narrower losses incurred in China," it said in a statement.

Revenue for FY21 rose 23.4% to RM4bil from RM3.24bil previously on higher sales orders from key customers in Malaysia and Indonesia.

In 4Q alone, group revenue rose 6.6% to RM841.1mil from the previous corresponding quarter.

However, net profit for the quarter fell 24.2% year-on-year to RM41.48mil, mainly owing to a one-off impairment on the investment in an associate amounting to RM25mil.

Excluding this impairment, adjusted profit before tax grew by RM7.8mil as compared to the corresponding quarter, notwithstanding that sales in Malaysia were affected by the implementation of the various movement control orders.

The board of directors declared a fourth interim dividend of 0.5 sen per share for the quarter under review, and proposed a final dividend of another 0.5 sen per share, subject to shareholders’ approval at the upcoming annual general meeting.

The total dividend for the financial year amounts to about RM113.8mil, representing a 46.4% payout based on FY21 net profit of RM245.3 mil, exceeding the group's 40% payout policy.

"Looking ahead, the demanding operating environment brought about by the Covid-19 pandemic, coupled with supply chain disruption, among others, are expected to prevail over the next 12 months.

"While the situation in Malaysia remains uncertain with the persistent high cases of Covid-19 infections, the significant progress made by the National Covid-19 Immunisation Programme would further pave the way towards the resumption of economic activities," said VS Industry managing director Datuk SY Gan.

He added that the group has completed the vaccination exercise for all its employees in Malaysia at its own Industrial Vaccination Centre under the PIKAS initiative.

Subsequently, production has returned to full capacity as the group continues to comply with all the standard operating procedures imposed by the government.

On demand outlook, Gan said orders across key customers in Malaysia remain healthy.

He added that several new product models will come into production progressively over the coming quarters while the group has recently commenced box-build production for a new customer.

Over in Indonesia, the performance is expected to sustain based on current order visibility. Meanwhile, the immediate focus in China remains on cost management given the taxing environment there.

"On balance, the Board is cognisant of the challenges ahead. The leadership is fully hands on managing the situation to deliver optimal outcome for clients while keeping employees safe.

"With prudent planning and careful execution by the management, the Board opines that the financial performance of the group for the coming fiscal year will be satisfactory," said Gan.

He added that the balance sheet remains healthy with a negligible net gearing at end-July 2021.

Gross cash holdings stood at RM402.4mil and backed by net assets of 54 sen per share.


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