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Venture Corp delivers blockbuster earnings; net profit up 135% in Q3
VENTURE Corp's net profit rocketed 135 per cent to S$111.4 million in the third quarter, as its focus on value creation through deeper engineering, design and research and development capabilities paid off.
Revenue in the three months ended Sept 30 was S$1.06 billion, a surge of 50.5 per cent from the same period a year earlier, as more than 60 per cent of its customer base also raked in higher revenues in the last quarter.
The electronics services provider's quarterly revenue has only crossed the S$1 billion mark once before. Venture has more than 180 active customers in diversified fields such as networking and communications and life sciences.
Chief executive Wong Ngit Liong said: "One thing we are tracking and maybe at the end of the year or next year we may show you more, but the trend is that our success correlates with the higher percentage of products where we have designed content. In this quarter alone, more than 65 per cent of our revenue came from products where Venture had designed content. Just one year ago, it was less than that and two to three years ago, even less than that ... We are focused on pursuing more technology-based activities."
Going forward, Venture will be monitoring this trend more precisely, in line with looking at its business from an "ecosystem" perspective instead of product by product, Mr Wong noted. "Product life is getting shorter and shorter, so it's a wrong approach to look at product by product ... We are forging very comprehensive, tight partnerships with key leaders in these ecosystems. These key partnerships enable us to earn their trust and confidence and as a result we have been able to contribute a lot more to our customers and our partners."
Venture is also building three centres of excellence in Silicon Valley, China and Malaysia, Mr Wong said. "Capacity is easy to build. Capacity is never the issue," he added.
Net profit margin in the third quarter was 10.5 per cent, up from 6.7 per cent in the same quarter last year. Net profit margin for the nine-month period was 7.9 per cent.
Venture is now guiding a net profit margin of 6-10 per cent in the mid to long term, up from 6-8 per cent previously.
Net profit per headcount was US$6,525, ahead of its competitors like Hon Hai and Flextronics.
Venture had net cash of S$535.1 million as at Sept 30, up from S$366.5 million as at June 30.
Asked if he is seeing any signs or a slowdown in orders, Mr Wong replied: "When I look at the component supply, the lead time is kind of stretching; that sounds like there's a lot of strong demand."
Earnings per share was 39.5 Singapore cents, up from 17.1 Singapore cents a year earlier. Net asset value per share was S$7.14 as at Sept 30, up from S$7.03 as at Dec 31 last year.
The counter rose two cents or 0.1 per cent to close at S$19.30 on Nov 3 before the results were announced.