SHA TIN, HONG KONG – Valuetronics Holdings said fiscal 2020 revenue fell 16.8% year-over-year to HK$2.35 billion (US$303.2 million).

A slowdown in demand from customers was the main reason for the EMS company’s industrial and commercial electronics revenue falling 13.7% to HK$1.4 billion, while consumer electronics revenue declined 21.1% to HK$916 million.

Net profit for the fiscal year ended Mar. 31 was HK$178.9 million, down 10.3% compared to last year.

On the Covid-19 outbreak in China, Valuetronics said stringent measures imposed by the Guangdong provincial government led production to recover at a slower-than-normal pace post-Chinese New Year. The group deferred its original post-CNY resumption to mid-February due to government restrictions.

When the group's China operations began normalizing gradually in mid-March, the pandemic worsened in Europe and North America. As a result, some of Valuetronics' customers temporarily shut down operations in response to lockdowns by their respective governments, creating an “adverse demand-side shock,” affecting orders across all segments since March.

That said, the group's expansion to Vietnam is progressing as planned, with its first leased manufacturing facility in Hanoi successfully launching trial production in May.

The firm’s fiscal 2021 outlook is “highly uncertain,” as the group is facing an unprecedented crisis affecting the entire world amid the backdrop of the Covid-19 pandemic and Sino-US trade tensions.

Although a series of precautionary and control measures for lowering operating costs are being carried out to mitigate the impact, Valuetronics said its fiscal 2021 financial results are expected to be significantly lower than fiscal 2020.

Ed.:  HK$1 = US$0.13

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