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Venture Corporation Ltd’s Latest Earnings: What Investors Should Know  

Venture Corporation Ltd  (SGX: V03) reported its third-quarter earnings results last Friday. The reporting period was for 1 July 2016 to 30 September 2016.

As a quick background, Venture Corporation is an electronic services manufacturer and it has expertise in a wide range of businesses such as printing & imaging, networking & communications, retail store solutions & industrial, computer peripherals & data storage, and more. The company’s customers primarily come from the Asia Pacific region.

You can read more about the company in here and here. You can also catch up with the results from its previous quarter here.

Financial highlights

The following’s a quick take on some of Venture Corporation’s latest financial figures:

  1. Venture Corporation’s third-quarter revenue was up 1.8% to S$705.7 million compared to the same quarter a year ago.
  2. Net profit for the period was $47.4 million, up 16.9% compared to a year ago.
  3. Consequently, earnings per share (EPS) for 2016’s third-quarter grew 15.6% to 17.0 cents.
  4. Cash flow from operations came in at $54.2 million for the third-quarter of 2016 with capital expenditure clocking in at $7.7 million. As such, free cash flow was over $46.5 million for the reporting quarter, down from the $60.0 million ($63.1 million in cash flow from operations and $3.06 million in capex) seen in 2015’s third-quarter.
  5. As of 30 September 2016, Venture Corporation has $427.6 million in cash and equivalents and around $90.62 million in borrowings. This is an improvement from a year ago when there was $378.5 million in cash and equivalents and $157.2 million in borrowings.

In all, Venture Corporation registered a minor increase in revenue, but a strong increase in profit. The company also reported positive free cash flow and still maintains a strong balance sheet.

A future outlook

Venture Corporation also added the following outlook in its earnings release:

“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.

At its closing share price of $9.50 last Friday, Venture Corporation traded at around 15.4 times trailing earnings with a trailing dividend yield of 5.2%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.