HONG KONG -- VTech Holdings' EMS unit reported sales rose for its fiscal first-half ended Sept. 30, led in part by higher demand for contract assembly work.

Revenue at its EMS business unit was $235 million for the six-month period, up 9.3% from last year.

Overall company revenue was up by 2.1% to $876.1 million for the period, while profits rose 3.1% to $91.2 million.

The company said that while raw material prices declined somewhat and China currency appreciation eased, labor cost and manufacturing overhead in China continued to rise, stifling gross margins.

North America sales rose 0.6% to $96.2 million, led by industrial products and commercial solid-state lighting. European sales rose 22% to $117.7 million on strong growth in medical and health products, and wireless headsets. Sales to the Asia Pacific declined 8.3% to $21.1 million, as a drop in Japan offset higher sales to China and South Korea.

The firm has added capacity to a manufacturing facility in China, which it says will enhance local sales and grow its medical and health business.