PETALING JAYA: VSTECS Bhd recorded a 23% fall in net profit to RM12.7 million for its third quarter ended on Sept 30 (Q3 FY2023) from RM16.5 million a year ago on higher distribution expenses and lower sales revenue.
In a bourse filing today, the information and communications technology (ICT) distributor said the drop was due to lower sales from both ICT distribution and enterprise system segments but was mitigated by higher sales of ICT services.
The weaker performance was also due to higher impairments of financial instruments and lower forex gains, it added.
For the nine months ended Sept 30 (9M FY2023), the group posted revenue of RM1.92 billion, an 8% drop compared to RM2.09 billion in 9M FY2022 due to a slowdown in the consumer market.
Its net profit grew slightly to RM43.2 million versus RM41.4 million in 9M FY2022.
In the first nine months, revenue from ICT Services grew 66.4% year-on-year while the revenue from the enterprise systems segment was comparable to last year.
Its ICT distribution segment, however, saw a revenue decline of 22.3% compared to 9M FY2022 as consumer spending remained cautious.
The group declared a first interim dividend of 2.5 sen per share, to be paid on Jan 12, 2024.
The group’s CEO JH Soong said muted consumer spending continued to impact the ICT distribution segment while the enterprise systems segment witnessed a temporary contraction in Q3.
On the other hand, he said ICT services revenue has shown consistent growth over several quarters, with its investment in nurturing public cloud engagements and services yielding good results.
“We are expecting cloud adoption to intensify, leading to an even wider take-up in the coming years, thereby increasing the contribution of the ICT services segment,” he added.
Despite the soft performance in Q3, the group holds a positive outlook for the remainder of the financial year.
“We anticipate a pick-up in the ICT distribution segment with the festive season spending (in Q4),” it said.
VSTECS Bhd is a leading distribution hub for ICT products, enterprise systems and provides ICT support and technical services. It has a nationwide channel network of more than 4,600 resellers comprising retailers, system integrators and corporate dealers.
The group’s share price was unchanged at RM1.35, giving it a market capitalisation of RM486 million.