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Venture Corp Q4 net profit falls 10.6% to S$96.3m
ELECTRONICS manufacturing services firm Venture Corp on Thursday announced a 10.6 per cent drop in net profit for the fourth quarter ended Dec 31, 2019 despite an increase in revenue.
This was due to an increase in spending for raw materials, changes in finished goods and ongoing works,which accounted for S$694 million, up 4.9 per cent from 2018.
The company also noted an 11.2 per cent rise in employee benefits expenses to S$85.3 million from the previous year, as it "continues to invest in its talent acquisition to strengthen competencies".
Its Q4 2018 expense was lower due to an adjustment for staff compensation over-provided in prior years, the company said in a bourse filing.
Q4 net profit declined to S$96.3 million from S$107.7 million the year before, while earnings per share were 33.4 Singapore cents, down from 37.5 cents a year ago.
Revenue edged up 2.9 per cent to S$932.1 million from S$905.9 million in Q4 2018.
For the 12 months ended Dec 31, net profit dipped 1.9 per cent to S$363.1 million, while revenue grew 4.3 per cent to S$3.6 billion.
Earnings per share slid to 126.0 Singapore cents from 128.8 cents a year ago.
However, the company said it is anticipating a stronger second half of 2020.
Despite disruption to the global supply chain due to quarantine measures for the Covid-19 outbreak, Venture said it has swiftly implemented corrective action plans to stabilise its assurance of supply.
Production capacity remains intact, as the majority of Venture's manufacturing footprint remains outside of China, it noted.
"Starting from the second quarter of 2020, the Group expects to be able to fulfil most - if not all - of customers' orders, including backlog from the first quarter of 2020," Venture said.
It added that it is well-positioned to capture new business opportunities as more customers continue to diversify their global supply chain network to South-east Asia, where most of its manufacturing footprint is located.
Separately, Venture said it will provide financial disclosures on a half-yearly basis with effect from the financial year ending Dec 31, 2020, following the regulator's removal of mandatory quarterly reporting.
Venture shares closed up 13 cents or 0.79 per cent to S$16.50 on Thursday before the results were announced.