VTech reports 14.5pc drop in net profit to US$134mln 

Hong Kong-based kid's technology maker VTech’s (0303) said on Thursday that its net profit for the financial year ended March fell 14.5 percent to US$134.1 million(HK$1.05 billion), amid an impact brought by shifting US tariff policies.

The company declared a final dividend of 36 US cents per ordinary share, bringing the total full-year dividend to 53 US cents per share.

The company noted that the decline in net profit was mainly due to lower revenue, an increase in total operating expenses as a percentage of group revenue and a higher group effective tax rate.

Revenue decreased by 6.9 percent to US$2.03 billion, which was driven by the decrease in revenue in all regions. 

Meanwhile, its gross profit declined 3.4 percent to US$663.4 million. Gross profit margin improved from 31.5 percent to 32.7 percent, driven by the lower cost of materials arising from the decline in material prices.  

Looking ahead, VTech noted that the US tariff situation appears to have stabilised somewhat, lending more certainty to purchase decisions. The conflict in the Middle East, however, is leading to higher prices of energy and oil-related products, as well as freight rates. The resulting inflation is negatively affecting consumer sentiment. A further deterioration of the situation in the Middle East could increase prices and tighten supply even further. 

The manufacturer added that the strong demand from the artificial intelligence industry is leading to serious shortages of certain electronic components. 

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓