VS Industry to continue with customer expansion plan

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KUCHING: VS Industry Bhd (VS Industry), listed among the world’s top 50 electronic manufacturing services (EMS) providers, has set its sights on expanding its customer base, leveraging on its vast experience in handling global clientele.

Speaking at the group’s Annual General Meeting (AGM) yesterday, VS Industry’s managing director Datuk Gan Sem Yam said that the group had ample production capacity in its manufacturing facilities in Malaysia and Indonesia to take on more sales orders from existing and new customers.

“In recent years, South East Asia has become a preferred destination for international brands to source their manufacturing requirements, due to the region’s easy access to emerging Asian markets, low manufacturing costs, accommodative pro-business Government policies to spur the growth in the manufacturing sector, as well as strong support system from raw material supply to a highly-skilled workforce.

“Since the 1980s, VS Industry has established a strong reputation for supporting customers from Japan, Europe, the UK and US.

“We continue to be in talks with several potential customers in the consumer electronics space, and hope to capture this demand,” Datuk Gan said.

VS Industry is able to undertake end-to-end EMS functions, from mould-making and injection to assembly, packaging and logistics.

For the first quarter ended October 31, 2014 (1Q15), VS Industry’s net profit tripled to RM35.2 million from RM9.6 million a year ago, on higher sales and positive operating leverage. Group revenue increased 24.5 per cent to RM544.6 million compared to RM437.3 million previously.

Gan further mentioned that the weakening ringgit versus the US dollar would not adversely impact VS Industry, given that the group’s exports and corresponding purchases are denominated in US dollar.

“We enjoy a natural hedge as we buy certain raw materials and also make a portion of sales in US dollar.”

“The nature of our business as a manufacturer-cum-exporter essentially shields us from the weaker ringgit, and may prove beneficial to the Group,” added Gan.

At the AGM, shareholders also approved the final single tier dividend of 3.5 sen per share in respect of the financial year ended July 31, 2014 (FY14).

Together with the three interim dividends of 2.2 sen, 2.5 sen and 3.5 sen paid earlier, VS Industry declared total dividends of 11.7 sen per share in respect of FY14.

The dividend payout of RM22.5 million translates to 42 per cent of the group’s FY14 net profit attributable to shareholders. This is in tandem with VS Industry’s 40 per cent dividend policy.