Venture Corporation Ltd’s Latest Earnings: Kicking Off 2017 With A Bang

Venture Corporation Ltd  (SGX: V03) reported its 2017 first quarter earnings last Friday. The reporting period was for 1 January 2017 to 31 March 2017.

As a quick background, Venture Corporation is an electronic services manufacturer that serves a variety of industries: printing & imaging, networking & communications, retail store solutions & industrial, computer peripherals & data storage and test & measurement / medical & life science / others. The firm’s business is primarily in the Asia Pacific region.

You can catch up with the results from Venture Corporation’s previous quarter here.

Financial highlights

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

1. First quarter revenue was up 33.7% to $843.1 million compared to the same quarter a year ago.

2. Net profit attributable to shareholders for the period was $48.6 million, up 35.6%.

3. Earnings per share (EPS) for 2017’s first quarter was 17.2 cents, a 33.8% jump from 12.9 cents in 2016’s first quarter.

4. Cash flow from operations fell slightly into negative territory. Capital expenditure was almost $10 million. As such, free cash flow was a negative $10 million for the reporting quarter. In 2016’s first quarter, Venture Corporation generated S$88.3 million in free cash flow (S$95.6 million in cash flow from operations and S$7.23 million in capex).

5. As of 31 March 2017, Venture Corporation had around $462.5 million in cash and equivalents and $87.2 million in borrowings. This is a slight decrease from the end of 2016 when Venture Corporation had around $474.7 million in cash and equivalents and $92.6 million in borrowings.

Venture Corporation delivered a big increase in revenue and profit to start 2017 with a bang. The electronics services provider also maintained a strong balance sheet, but its free cash flow for the quarter fell into negative territory.

Operational highlights and the outlook ahead

Venture Corporation said that its revenue benefited from its diverse customer base and new product and programme introductions by a number of customers. The following outlook was also shared as part of its earnings release:

“The Group has begun the year with positive momentum.

Financial performance improved year-on-year on the strength of the Group’s ability to achieve compelling differentiation underpinned by its well regarded engineering and advanced manufacturing capabilities, sustained operational excellence, as well as its new product/programme execution with several customers.

The Group remains vigilant of intense industry competition.

To stay ahead, the Group will continue to execute with excellence in quality, productivity and value creation. As Venture strives to render exceptional and impactful solutions to its partners and customers, it will continue to focus on investing in transformative engineering talents and advanced manufacturing capabilities.

While the Group expects to execute well, it is cognizant of externalities such as geopolitical tensions and potential consolidations which may introduce some degree of uncertainty. Amid this dynamic and evolving global environment, the Group’s unwavering commitment to its long-term strategic initiatives and objectives will continue to keep it on course.”

At its closing share price of $12.20 last Friday, Venture Corporation traded at 17.6 times trailing earnings and has a dividend yield of 4.1%.

For more stock analyses and investing tips, sign up here for your FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock SingaporeIt will teach you how you can grow your wealth in the years ahead.

Like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

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.