“We are optimistic about the group’s prospects. During the year, we have successfully secured several major orders – a US$82mil contract to produce a new coffee-brewer model that was fully designed by us, a committed minimum RM100mil order per annum to manufacture water filtration-related products and a contract to produce a new air purifier model.
“Earnings from these contracts will come in from FY17,” said managing director Datuk S. Y. Gan in a statement yesterday.
For its fourth quarter ended July 31, VS Industry posted an almost 80% drop in net profit compared with a year ago mainly because of an impairment loss of RM21.8mil from its solar power plant project.
“Efforts are being made to recover the deposits paid for the proposed investment in the solar power plant.
“Nevertheless, the provision was made at this juncture to reflect the management’s prudent and conservative approach in assessing the collectability of the deposits,” VS Industry said in the statement.
During the quarter, the company also saw a 40% decline in profit before tax for its operations in Malaysia because of a lower foreign exchange gain.
The company’s net profit in the fourth quarter fell to RM11mil from RM53mil a year ago, on the back of strong sales of RM554mil compared to RM507mil previously.
VS Industry has declared a fourth interim single-tier dividend of 0.8 sen, and has proposed a final single-tier dividend of another 0.8 sen, bringing the total dividend for FY16 to 4.7 sen. Shares in VS Industry closed unchanged at RM1.34 yesterday.
For FY16, the company posted an 11% decrease in net profit to RM118mil from RM133mil in FY15.
Revenue for the period rose 12% to RM2.2bil compared with RM1.9bil previously.
“We have received more orders in FY16 compared with FY15, It’s a good sign as our customers continue to achieve brisk sales for their products. As our customers sustain their sales growth, we, as the original equipment manufacturer and original design manufacturer, will certainly stand to benefit from the increased order flow,” Gan said.
