KUALA LUMPUR: VSTecs Bhd posted a 25 per cent higher net profit to RM14.8 million in the first quarter ended March 31, 2023 (1Q23).

Group revenue stood at RM664.7 million,  marking a 3.3 per cent growth to RM643.8 million compared to the corresponding period of the preceding year. 

The information and communications technology (ICT) distributor said the enterprise systems and ICT services segments’ revenue increased by 30.6 per cent and 39.7 per cent respectively.  

The growth, it added, underscored the ongoing upward trend in enterprise spending on infrastructure and digital transformation, as businesses increasingly recognise the critical role of technology in maintaining competitiveness in today’s business landscape. 

The ICT distribution segment, however, experienced a revenue decline of 25.2 per cent compared to 1Q22, reflecting consumers’ heightened caution towards discretionary spending.  

Despite this, VSTecs said it remainef focused on adapting to market dynamics and meeting evolving consumer demands. 

VSTecs said the higher RM14.8 million net profit was underpinned by higher profit margin contribution from the enterprise systems and ICT services segments. 

Chief executive officer JH Soong said Vstecs was witnessing a significant increase in enterprise spending on technology, and expected the trend to extend well beyond 2023. 

“As technology continues to evolve, we have a vast runway ahead of us, with plentiful opportunities to support the digital transformation journey of enterprises in both the public and private sectors,” he said in a statement today. 

Soong added that in line with Malaysia’s emergence as a prominent regional data centre hub, the company recently secured several distributorships for data centre power solutions.  

These will complement the company’s existing data centre offerings, enabling it to deliver a comprehensive value proposition and serve evolving market needs. 

Soong said the ICT services segment would trace the growth trajectory of the enterprise segment.  

He noted that VSTecs’ investments into cloud services over the past two years would make a positive contribution in 2023, with further growth expected in the near future.  

“We are also growing the maintenance and managed services under this segment to increase recurring revenue and provide further earnings visibility for our group.  

“We are currently finalising several new data centre and cloud related projects, and hope to announce some positive news soon,” he said. 

Soong also said while the ICT distribution segment was anticipated to have a subdued performance this year due to softer consumer spending on end-point devices, it remained a crucial pillar of our business. 

He said due to the cyclical nature of product upgrades, the company expected consumer spending on end-point devices to regain momentum next year, with the introduction of 5G technology and the onset of the replacement cycle for numerous consumer IT products sold during the pandemic.

Source from https://www.nst.com.my