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Venture Corporation Ltd’s Latest Result Shows Lower Revenue and Net Profit

Last Friday, Venture Corporation Ltd (SGX: V03) announced its fourth-quarter results for the financial year ended 31 December 2018. Venture is an electronics manufacturing services provider with expertise in a wide range of activities.

Here are 10 things investors should know from the company’s latest earnings announcement:

  1. Revenue for the quarter went down 16.6% year on year to S$905.9 million.
  2. Profit before tax fell by 25.9% year on year to S$124.5 million.
  3. Similarly, profit attributable to shareholders declined by 24.7% year on year to S$107.7 million.
  4. Venture’s diluted earnings per share (EPS) worsened by 25.1% year on year to 37.1 Singapore cents.
  5. Profit before tax margin also fell from 15.5% last year to 13.7% in this quarter.
  6. As of 31 December 2018, the company had S$712.8 million in cash on the balance sheet and a S$1.8 million loan. This gives it a net cash position of S$711.0 million, down marginally from S$721.6 million as of 31 December 2017.
  7. Year to date, operating cash flow came in at S$254.2 million, down from S$448.5 million last year. The deterioration in operating cash flow was due to negative changes in working capital.
  8. Working capital grew by S$134.2 million year on year to S$1,015.1 million, mainly due to the increase in inventories and decrease in trade payables, offset partially by the decrease in trade receivables.
  9. The company proposed a final dividend per share of S$0.50. Including the interim dividend of S$0.20 per share paid, the total dividend per share for 2018 would be S$0.70.
  10. The company’s management provided the following outlook:

“Following its sequential revenue growth in 4Q 2018, Venture expects, in 2019, to drive revenue growth from the Group’s broad-based portfolio of technology domains, and continued success in new product launches for its partners. There have been increased interest from businesses looking to relocate production to Southeast Asia due to the US-China trade war. This is expected to present new business opportunities for the Group. Venture remains alert to respond to any development in the global economy that may introduce new uncertainties to the operating environment.

Venture will focus on enhancing its globally linked Clusters of Excellence, in support of its next phase of growth. Leveraging on its new facilities in Milpitas, California, USA, which is strategically located in the Silicon Valley, Venture aims to develop several dynamic ecosystems with its embedded Clusters of Excellence, to serve new markets in selected technology domains in the years ahead. This will broaden the Group’s value creation/value capture along multiple pathways to chart its business roadmap for future quality growth.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned.