Grand Venture Technology posts 8.9% rise in Q1 2022 after-tax profit

MAINBOARD-LISTED manufacturing-service provider Grand Venture Technology on Friday (May 6) posted a first-quarter net profit after tax of S$3.6 million, up 8.9 per cent from S$3.3 million a year ago. (* see Amendment note)

Earnings before interest, tax, depreciation and amortisation (Ebitda) also rose 19.5 per cent in the first quarter to S$7.8 million, up from S$6.5 million a year ago.

The growth in net profit after tax and Ebitda came on the back of a 41 per cent increase in revenue to S$32.5 million in Q1 2022, up from S$23 million in Q1 2021, the group said in a business update. 

The top and bottom-line improvements were driven by continued growth of wallet share from key customers, though margins came in lower as the group “absorbed capacities for future growth”, it added. 

The group recorded revenue growth across all its business segments - most significantly in the semiconductor segment, which rose 34.1 per cent to S$21.8 million in the first quarter. 

This was due to sustained demand for semiconductor chips and addition of new customers and projects from the group’s recent acquisitions, which led to increased contribution from all key customers in the segment, it said.

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Revenue from the life sciences segment recorded a 29.1 per cent improvement to S$4.9 million, “on increased production volume for existing mass spectrometers and its bolt-on products, and expanded wallet share from new customers in the segment”, the group added.

Revenue from the segment which grouped electronics, aerospace, medical and others rose 93.8 per cent to S$5.7 million in Q1 2022. This was following “continued demand growth” across all key customers in the segment and maiden contribution from the group’s recent acquisitions, including S$0.8 million from the aerospace business, it said. As a result, the segment's contribution to the group's revenue expanded to 17.7 per cent in the first quarter, compared with 12.9 per cent for the same period last year.

Looking ahead, the group observed that uncertainties in global economic conditions are expected to present challenges in the form of higher input costs. “While this may lead to some margin erosion in the short term, the group intends to work towards passing on some of the cost increase to its customers,” it said.

In the meantime, the group said it is working on the “synergistic customer developments and utilisation of capacities” across its newly acquired subsidiaries, J-Dragon and Formach, which it believes should contribute to improvement of margins in the near future.

Shares of Grand Venture Technology ended Friday at S$0.975, down S$0.010 or 1 per cent before the results release.

*Amendment note: An earlier version of this story incorrectly said that Grand Venture Technology is a Catalist-listed company. It is listed on the Mainboard.