KUALA LUMPUR: Electronics manufacturing services (EMS) provider VS Industry Bhd registered a net loss of RM19.53 million in the third quarter ended April 30, 2020 versus a net profit of RM31.38 million a year ago.
Its revenue in the same quarter shrank 43.1 per cent to RM505.66 million from RM888.26 million, primarily due to impact arising from the temporary closure of its Malaysian factories following the Movement Control Order (MCO).
Besides Malaysia, the company has operations in Indonesia and China.
VS managing director Datuk SY Gan said the company had adhered to the MCO and halted its Malaysian operations from March 18 before restarting in the later part of April under the conditional MCO phase after obtaining the regulatory approvals.
He said the production pace had since picked up steadily and its plant was operating at full capacity while in compliance to the standard operating procedures (SOPs).
"Following the resumption of our operations, the group expects to return to profitability in the coming quarter," he said in a statement.
Gan, however, said the situation remains challenging and demanding with consumer spending across the world affected by the impact of economic loss arising from the Covid-19 pandemic and the resultant strict movement control measures.
Therefore, he said the company anticipated the overall order flow from customers during the current financial year to be lower than the previous year.
He said visibility of order flow was shorter compared to previously.
"In the meantime, the discussions with prospective customers have not made much progress due to the restriction on international travels.
"On a brighter note, many countries are now progressively opening up their economies and hence, the situation should be improving gradually," he said.
Gan said with the current challenging business landscape, the company expects its overall results of the for the current year to be lower than last year.
"Nevertheless, the longer-term prospects of VS remain intact. Under the stewardship of the experienced board and management, which is further backed by our strong balance sheet, the group is confident to navigate through the prevailing challenges," he said.
For the nine months, VS' net profit decreased 43.4 per cent to RM61.74 million from RM109.13 million, while revenue decreased 19.7 per cent to RM2.36 billion from RM2.94 billion.