We are at the tail-end of the earnings season. Many companies have reported their results in the past few weeks — some of them have had good news to share, and some bad.
Today’s we’re looking at two companies that had some not-so-good news to share; they both recently reported negative results.
First up is Venture Corporation Ltd (SGX: V03), an electronics manufacturing services provider with expertise in a wide range of activities.
In the latest quarter ended 31 December 2018, Venture reported that revenue went down 16.6% year on year to S$905.9 million. Similarly, profit attributable to shareholders declined by 24.7% year on year to S$107.7 million. As a result, Venture’s diluted earnings per share (EPS) worsened by 25.1% year on year to Singapore 37.1 cents.
As of 31 December 2018, the company had S$712.8 million in cash on the balance sheet and S$1.8 million in loans. This gives it a net cash position of S$711.0 million, down marginally from S$721.6 million as of 31 December 2017. It also proposed a final dividend per share of S$0.50 in the quarter. Including the interim dividend of S$0.20 per share paid, the total dividend per share for 2018 would be S$0.70.
Lastly, the company provided the following outlook guidance:
“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.”
Next up is Oversea-Chinese Banking Corp Limited (SGX: O39), one of the three major banks based out of Singapore, along with United Overseas Bank Ltd and DBS Group Holdings Ltd.
For the quarter ended 31 December 2018, OCBC reported that total income fell by 11% from a year ago to S$2.4 billion. On one hand, net interest income (income from loans) grew 7% year on year to S$1.5 billion, driven by improvement in net interest margin and loan volume growth. Yet, non-interest income fell by 32% year on year, led by a drop in investment and insurance income from Great Eastern Holdings Limited. Consequently, quarterly net profit fell by 11% year on year to S$926 million.
The board of OCBC proposed a final dividend per share of S$0.23. Including the interim dividend per share of S$0.20 paid, total dividend per share would be S$0.43 for 2018.
CEO Samuel Tsien commented on OCBC’s outlook:
“Looking ahead, global economic growth is expected to slow on concerns of continued trade and geopolitical tensions, subdued market and investment sentiments and rising policy risks in the advanced economies. In spite of the uncertain outlook, we are confident that our focused strategy, strong capital and funding base, and disciplined cost control will allow us to continue to prudently expand our franchise in our key markets and support our customers.”
Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.
The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook to keep up-to-date with our latest news and articles.
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. The Motley Fool Singapore recommends DBS Group Ltd, United Overseas Bank Ltd, and Oversea-Chinese Banking Corp Limited.