V Tech profit falls as it looks ahead

Business | Tereza Cai May 21, 2019
<p>Electronic products maker VTech (0303) said its net profit for the year ended March 31 fell 17 percent from a year ago to US$171.3 million (HK$1.34 billion), declaring a final dividend of 50 US cents per share, compared with a 63 US cents final dividend in 2018.</p><p>Revenue increased 1.5 percent year-on-year to US$2.16 billion. The increase in revenue was largely driven by higher sales in Europe and the Asia Pacific, which offset the decrease in revenue in North America and other regions. Gross margin declined 3.6 percentage points to 29.4 percent.</p><p>North America generated 46 percent of its total revenue for the year ended March 31, Europe 40.8 percent and the Asia Pacific 11.5 percent.</p><p>It said that none of its electronic learning products business or telecommunication products is subject to the new US tariffs imposed on Chinese imports. However, a number of its contract manufacturing service customers in the US are affected.</p><p>Despite this, there was little impact on the group revenue for the financial year 2019.</p><p>Group revenue is difficult to gauge for the financial year 2020, and it is now assessing the impact and taking steps to mitigate it, which include expanding its new production facilities in Malaysia.</p>

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June 2019