KUALA LUMPUR (March 28): VS Industry Bhd posted a 28% year-on-year (y-o-y) rise in net profit in its second quarter today, as revenue jumped 46% y-o-y on higher sales orders from existing key customers.

The group's net profit for the three months ended Jan 31, 2018 (2QFY18) rose to RM45.28 million from RM35.51 million a year ago, while revenue climbed to RM1.11 billion from RM763.84 million.

Quarterly earnings per share grew to 3.53 sen, from 3.02 sen a year ago, the integrated electronics manufacturing services provider's Bursa Malaysia filing showed.

A second interim dividend of 1.5 sen per share, payable on April 27, was declared.

For the cumulative six months ended Jan 31 (1HFY18), VS Industry's net profit jumped 32% y-o-y to RM91.27 million from RM69.01 million, while revenue surged 52% to RM2.2 billion from RM1.44 billion as it recorded higher sales orders.

But the growth in profit wasn't proportionate due largely to start-up costs with new assembly lines that came on-stream progressively. This, coupled with the weakening of US dollar against the ringgit, had affected gross margin, it said.

While VS Industry said its overall prospects remain positive, underpinned by sustained orders from its customers, the group is cognisant of macro-economic challenges which include fluctuations in the foreign exchange rate and changes in regulations that may affect operating costs.

It also foresees that there will be drop in production volume for a key customer this year due to planned cessation of production for certain models that had reached end of product lifecycle, which will be replaced by new models, with production commencing in 4QFY18.

In addition, it said operational efficiency at its Malaysian production lines is expected to improve gradually, as the new production lines reach their optimal production progressively.

Shares in VS Industry slid 5 sen or 1.95% to close at RM2.52 today, with a market capitalisation of RM3.36 billion. The counter has declined 15.4% year-to-date, from RM2.98 on Dec 29.