KUALA LUMPUR, 16 MAY 2019 – VSTECS Berhad (formerly known as ECS ICT Berhad) (VSTECS, 偉仕佳杰; Reuters: VSTE.KL) (“VSTECS” or “The Group”), Malaysia’s leading Information & Communications Technology (“ICT”) distributor, today announced its financial results for the first quarter ended 31 March 2019 (“Q1FY19”) posting RM378.8 million in revenue, a slight drop of 3.3% as compared to RM391.8 million recorded in the preceding year’s corresponding quarter (“Q1FY18”). The lower revenue was mainly due to the continued prevailing trend of frugal consumer spending on ICT products.

For Q1FY19, The Group’s gross profit (“GP”) decreased by 8.5% to RM18.3 million, compared to RM20.0 million recorded for Q1FY18 with a higher write-down on inventories at RM1.2 million versus RM163,000 noted last year. On the other hand, with lower operating expenses mainly from lower impairment loss on trade receivables by RM458,000 and sales related expenses, VSTECS posted higher Profit Before Tax (“PBT”) at RM6.1 million, an increase by 4.9% as compared to RM5.8 million reported for Q1FY18. Subsequently, The Group posted Profit After Tax (“PAT”) of RM4.2 million for the quarter under review.

During Q1FY19, The Group registered improvement for both its Enterprise Systems and ICT Services segments with increased sales of 7.9% at RM110.1 million and 38.6% at RM12.4 million respectively as compared to RM102.0 million and RM9.0 million recorded for Q1FY18 correspondingly. The increased revenue for the Enterprise Systems segment was mainly derived from servers, networking and storage, whilst the improvement for ICT Services segments was due to higher sales from the Enterprise Systems segment. Revenue from The Group’s ICT Distribution segment, however, declined 8.7% to RM256.4 million for Q1FY19 as compared to RM280.8 million recorded for Q1FY18.

Chief Executive Officer of VSTECS, Mr. Soong Jan Hsung expressed: “The economic outlook remains challenging for Malaysia due to weak consumer sentiment fueled by anxiety over the rising cost of living. Since the end of March, the Malaysian Ringgit has weakened against the US Dollar and we expect the demand of ICT products from consumers in Q2 2019 to remain sluggish due to higher prices.” 

“The demand for the enterprise ICT products in the private sector continues to be stable for this year. However, with the anticipated increase in public sector ICT projects, we expect better demand for our enterprise systems in the second half of 2019. Furthermore, we have recently added on distributorships of new brands of smartphone and e-Sports notebook to increase the revenue of our consumer segment. On the Enterprise Systems and ICT Services segments, we continue to focus our investment into cloud datacentre, hyperconverged infrastructure and cybersecurity products to expand our enterprise business.”, Mr. Soong added.