Venture 3Q Net Profit Up 17% YoY


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Singapore-based EMS firm Venture Corp. Ltd registered a net profit of S$47.4 million for the third quarter of 2016, an improvement of 16.9% year-on-year. For the nine months ended 30 September 2016, the Group recorded net profit of S$126.6 million, an improvement of 16% year-on-year. Free cash flow for the nine months ended 30 September 2016 was S$181.3 million, an increase of 35.7% year-on-year. Year-to-date, revenue of the Group exceeded S$2.0 billion, an improvement of 2.9% year-on-year.

Financial Performance

For the quarter ended 30 September 2016, Venture registered revenue of S$705.7 million, an increase of 1.8% year-on-year. Compared to the prior quarter, revenue for the reported quarter rose by 3.3%. For the nine months ended 30 September 2016, revenue improved by 2.9% year-on-year to S$2,019.6 million.

The Group registered profit before tax (PBT) of S$56.7 million for the quarter ended 30 September 2016, an increase of 18.0% compared to the corresponding quarter of the prior year. For the nine months ended 30 September 2016, the Group recorded PBT of S$150.8 million, an increase of 17.2% year-on-year. Based on tax incentives granted to the subsidiaries of the Group, an income tax expense of S$9.2 million was recorded for the reported quarter. The Group registered net profit (profit attributable to owners of the Company) of S$47.4 million, an improvement of 16.9% year-on-year. For the nine months ended 30 September 2016, net profit rose 16.0% year-on-year to S$126.6 million. The net profit margin for the reported quarter was 6.7% (3Q 2015: 5.9%) and 6.3% for the nine months ended 30 September 2016 (9M 2015: 5.6%). The improvement in profitability was largely driven by the Group’s ability to create higher value through stronger complementary and collaborative partnerships. Diluted Earnings Per Share for the quarter ended 30 September 2016 was 17.0 cents (3Q 2015: 14.7 cents). For the nine months ended 30 September 2016, diluted EPS was 45.5 cents (9M 2015: 39.5 cents).

Financial Position and Cashflow

During the quarter, the Group generated cash from operations of S$66.6 million (3Q 2015: S$71.5 million). Working capital for the reported quarter closed at S$747.8 million, reduced by S$25.7 million compared to the quarter ending 31 December 2015, largely due to lower net trade receivables-payables position for the reported quarter. For the nine months ended 30 September 2016, the Group generated cash from operations of S$207.6 million (9M 2015: S$145.0 million). This improvement in cash generation was largely due to higher profitability and a lower working capital position. As at the end of the reported quarter, the Group had cash and bank balances of S$427.6 million and was net cash positive at S$337.0 million. The net cash position for the reported quarter was higher by S$115.7 million compared to the corresponding quarter of 2015. As at 30 September 2016, Equity attributable to owners of the Company was S$1,844.8 million and Net Asset Value per share was S$6.64.

Outlook

The industry is undergoing rapid changes and transformation. In the thick of all this, Venture has successfully identified and carved out opportunities through its growing Clusters of Excellence in selected technology domains. Structurally, Venture will continue to forge new complementary and collaborative alliances and partnerships with industry leaders in its fields of interest. The challenge will be to sustain strong value creation, underpinned by Venture’s well regarded engineering capabilities, operational excellence, robust business model and strong leadership.

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