Venture 1H 2017 Net Profit Jumps 50%


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In the second quarter of 2017, Singapore-based EMS firm Venture Corp. Ltd registered a 61% jump in net profit to S$69.8 million. This improvement in profitability is made possible through high value creation and capture underpinned by Venture’s deep engineering bench strength and operational excellence. For the six months ended 30 June 2017, net profit improved by 49.5% to S$118.4 million. Revenue for the reported quarter rose above S$1.0 billion, up 48.3% year-on-year.

FINANCIAL PERFORMANCE

For the quarter ended 30 June 2017, the Group registered revenue of S$1.01 billion, an increase of 48.3% year-on-year. For the six months ended 30 June 2017, revenue improved by 41.3% year-on-year to S$1.9 billion. Revenue improvement for the reported quarter and for the first half of 2017 is underpinned by the Group’s diversified customer base and continuing strong execution of customers’ programs launched in prior quarters.

In tandem with the revenue growth, the Group recorded profit before tax (PBT) of S$84.5 million for the quarter ended 30 June 2017, an increase of 63.7% year-onyear. For the first half of 2017, the Group recorded PBT of S$144.5 million, an increase of 53.6% year-on-year. In line with the higher PBT and based on tax incentives granted to its subsidiaries, the Group reported income tax expense of S$14.7 million for the reported quarter and S$26.1 million for the first half of 2017.

Net profit rose 61% year-on-year to S$69.8 million for the reported quarter. For the six months ended 30 June 2017, net profit rose 49.5% year-on-year to S$118.4 million. The Group registered net margin of 6.9% for the reported quarter (2Q 2016: 6.4%) and 6.4% for the first half of 2017 (1H 2016: 6.0%).

Diluted Earnings Per Share for the reported quarter was 24.4 cents (2Q 2016: 15.6 cents) and 41.6 cents for the first half of 2017 (1H 2016: 28.5 cents).

FINANCIAL POSITION AND CASHFLOW

The Group generated operating cash flow of S$92.1 million before working capital changes for the quarter ended 30 June 2017 (2Q 2016: S$60.7 million). For the six months ended 30 June 2017, operating profit before working capital changes amounted to S$162.4 million (1H 2016: S$116.2 million). For the quarter ended 30 June 2017, the Group registered an increase in working capital position largely due to trade receivables and inventories balances. Trade receivables balance stood at S$808.8 million in tandem with the revenue recorded for the reported quarter. The increase in inventories was primarily to support customers’ requirements and programs.

For the six months ended 30 June 2017, the Group generated cash from operations of S$121.4 million (1H 2016: S$141.0 million).

As of 30 June 2017, the Group had S$441.7 million of cash and bank balances (S$499.7 million as at 31 December 2016). During the quarter, the Group paid a final tax-exempt dividend of 50 cents per ordinary share amounting to S$140.7 million (2Q 2016: S$138.4 million). As at the end of the reported quarter, the Group remained net cash positive at S$366.5 million (S$407.1 million as at 31 December 2016).

As at 30 June 2017, Equity attributable to owners of the Company was S$1.9 billion (S$2.0 billion as at 31 December 2016) and Net Asset Value per share was S$6.81 (S$7.03 as at 31 December 2016) after payment of dividend.

OUTLOOK

Venture continues to make progress across its strategic and operational initiatives. Through its unique TCS management practice, Venture has deepened its alliances and partnerships for value creation with leaders in technology ecosystems of interests. It has also enabled the Group to forge new collaborative alliances culminating in new programs and to capture additional opportunities across its diversified customer base. Venture has also been able to seize new opportunities in several fast-growing adjacent ecosystems.

The dynamics of the business environment such as geopolitical tensions and customers’ consolidations may introduce some degree of uncertainty. However, Venture remains fully committed to provide strong value creation for the success of its business alliances and partnerships. This is accomplished through growing a critical mass of high quality talents in management, engineering and other professionals. Venture will harness the collective strength and synergy of its human capital to relentlessly create compelling differentiation, advancing Venture’s position as a leading global provider of technology solutions, products and services.

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