Grand Venture Tech posts 34% drop in FY2019 after-tax profit

GRAND Venture Technology on Monday posted profit after tax of S$3.1 million for the full year ended Dec 31, down 33.9 per cent from S$4.69 million a year ago.

The manufacturing service provider, which listed on the Catalist board in January 2019, saw revenue shrink 2.3 per cent to S$40.1 million, mainly due to lower takings in its main semiconductor segment. The semiconductor industry is facing softer near-term demand in response to global trade tensions, resulting in lower revenue in all of the group's geographical markets.

The fall was partially offset by a 57.7 per cent rise in sales from the life science, electronics and others segment to S$16.2 million from S$10.3 million a year ago. This was driven by increased customer orders after Grand Venture received first article approvals from certain customers in FY2019.

Earnings per share were 1.34 Singapore cents compared with 2.67 cents for the previous year. No dividend was declared.

The group said it maintains an optimistic view of the growth prospects for the semiconductor industry and life science and electronics market in the mid to long term, but remains cautious amid the uncertain global economic outlook due to US-China trade tensions and the Covid-19 outbreak.

Grand Venture said it is still assessing the impact of the outbreak on the group and its Chinese subsidiary Grand Venture Technology (Suzhou) (GVTSZ), which manufactures supply for the company in Singapore. In the event that production at GVTSZ is affected by measures and restrictions imposed by the Chinese government, Grand Venture is able to shift production to its Singapore and Malaysia facilities to ensure minimal disruption.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

GVTSZ's external sales as a percentage of the group's revenue in FY2019 were approximately 3 per cent, and sales contribution from customers in China constituted less than 10 per cent of group revenue in the same year.

"Due to the above reasons, management estimates that the impact of the Covid-19 outbreak on the operations and financial performance of the Group will not be significant," Grand Venture said.

"Notwithstanding that, the Group will stay vigilant on the development of the situation and will be responsive to act on any unforeseen circumstances arising from the impact of the disease."

Grand Venture shares last closed unchanged at 27 Singapore cents on Feb 17.