JOHOR BHARU: Leading electronics manufacturing services (EMS) provider V.S. Industry Bhd reported a revenue of RM3.79 billion for the financial year ended July 31, 2025 (FY25), versus RM4.25 billion a year ago.
This was largely due to lower sales orders, as well as the effects of deferred order delivery at the request of customers in Q4 FY25, following the announcement of reciprocal tariffs, which caused market uncertainties and dampened sentiment.
FY25 profit before tax (PBT) and net profit came in at RM75.0 million and RM36.7 million, respectively, vis-à-vis RM268.5 million and RM246.0 million in FY24.
Note that FY24 performance included one-off non-cash accounting gain of RM50.5 million resulting from the dilution of the group’s equity interest in VS International Group Ltd, as well as RM13.5 million impairment on plant and equipment.
Meanwhile, contributing factors to the weaker FY25 results included lower revenue, cost-down pressures from customers, as well as plant setup costs and RM24.9 million in losses from the Philippines plant, which is still in its gestation period.
In addition, there were one-off impairment losses on trade receivables amounting to RM6.0 million and on plant and equipment totalling RM7.1 million.
Adjusting for these exceptional items, FY25 PBT would have been higher at RM88.1 million.
Managing director Datuk SY Gan said that, as an export-based company with the US being one of its key markets, the reciprocal tariffs had a larger-than-expected adverse impact on the group’s Q4 FY25 performance, as the extent of customer adjustments to the measures was more pronounced than initially anticipated.
“This was coupled with specific impairments that were deemed necessary to reflect our prudent practice.
“Looking ahead, the near-term operating environment is expected to remain challenging. The group’s performance over the next few quarters will continue to be influenced by prevailing consumer sentiment and our customers’ outlook on the broader market.
“The reciprocal tariff rate for Malaysia has now been fixed at 19%, which is in line with most other export-oriented manufacturing countries in Asean. With this clarity, we expect greater visibility on order flows to emerge in the coming quarters,“ he said in a statement.
On a brighter note, Gan said orders have picked up in Q1 FY26, and several new models have also entered mass production.
“We opine there would be a return of some normalcy as industry stakeholders, including customers and suppliers, adapt to the reciprocal tariffs.
“We are in active discussions with customers on product cost structures. Meanwhile, the Philippines operations, having recently commenced mass production, are expected to see gradual improvements in utilisation rates,“ he further added.
Against this backdrop, the group remains highly focused on lean production, enhancing operational efficiency, and exercising prudent cost control.
Operations continued to be backed by a solid balance sheet with strong cash holdings, and the board opines the group’s performance in the coming fiscal year to be satisfactory, barring unforeseen circumstances.
Meanwhile, VS’s Q4 FY25 revenue stood at RM858.8 million, compared to RM1.21 billion in the same period last year.
The group posted a loss before tax (LBT) of RM30.6 million and a net loss of RM33.0 million versus a PBT of RM104.6 million and a net profit of RM126.6 million, respectively, in Q4 FY24.
The Q4 FY25 LBT comprised RM20.5 million losses from the Philippines operations, together with the earlier mentioned one-off impairment losses on trade receivables of RM6.0 million and on plant and equipment totalling RM7.1 million in the current quarter.
Excluding these two impairments, Q4 FY25 LBT would have been RM17.5 million.
For comparison, Q4 FY24 results included a one-off accounting gain of RM50.5 million and an impairment of RM13.5 million on plant and equipment.
The board did not propose a dividend for the current quarter.
Total dividend per share for the current financial year amounts to 1.4 sen or RM51.9 million, which includes a share dividend distribution of treasury shares on the basis of one treasury share for every 125 existing ordinary shares held, translating to 0.6 sen per share or RM21.0 million.
This works out to a payout ratio of 141.3% based on FY25 net profit of RM36.7 million.