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Electronics Production | August 07, 2009

Venture's revenue up 17% from 1Q figures

Venture achieved revenue of S$846.0 million for the second quarter of 2009, 17% above revenue recorded for the first quarter of the year. On a year-on-year basis, revenue was 13% lower.
For the quarter ended 30 June 2009, the Group registered Profit After Tax and Minority Interest (“PATMI”) of S$60.9 million. Compared to the first quarter of 2009, PATMI improved significantly by 120%. Cash generation remains strong. For the quarter ended 30 June 2009, cash from operations amounted to S$72.8 million. Cash and Cash Equivalent balances were S$484.6 million at the end of the quarter.

Group’s revenue of S$846.0 million in the second quarter of 2009 was 17% higher quarter-on-quarter.
The recovery from the first quarter of the year was due to demand pick-up for several products and improvement in market share. All product segments, except Test & Measurement/Others, registered improvement in revenue. The Printing & Imaging segment grew by more than 36% sequentially.

The Retail Store Solutions & Industrial Products segment made progress in the quarter with a 9% rise in revenue over the prior quarter. The Computer Peripherals & Data Storage segment, as well as the Networking & Communications segment recorded higher revenue sequentially of 8% and 7% respectively.

The Group’s PATMI of S$60.9 million included a fair value market adjustment on its derivative financial instrument which amounted to a positive S$25.0 million and a foreign currency exchange adjustment loss of S$4.3 million. At a PATMI level, adjusted for these charges, earnings for the quarter would have been S$40.2 million, an improvement of 29% over PATMI recorded for the prior quarter similarly adjusted for the said charges.

The Group’s balance sheet remained healthy. Cash generated from operations for the quarter was in excess of S$72 million. At the close of the reporting quarter, the Group remained net cash positive at S$218.7 million, 14% higher than the net cash position of the Group as at 31 December 2008. This is net of payment of final dividend of 50 cents per share amounting to S$137.1 million in May 2009 and capital expenditure of S$9.2 million. The latter comprised mainly of acquisition of industrial land and building in Malaysia.

The Group continued to place strong emphasis on operational efficiency and excellence, cost discipline and judicious management of working capital. In spite of the increase in business activity, inventory level reduced by 15% from the prior quarter. As at 30 June 2009, total shareholders’ equity of the Group amounted to S$1.8 billion. The Net Asset Value per share of the Group was S$6.75 at the end of the financial period reported on.

Outlook
On a quarter-on-quarter basis, the Group registered a double-digit growth in revenue. All product segments made gains except for Test & Measurement /Others. Sentiments of the Group’s customers remained mixed and divergent. In general, most are more positive about their second half business prospects. However at this point in time, they are not prepared to commit to the pace and trajectory of recovery.

The Group will continue to focus on operational excellence, differentiation and innovation to enlarge its market share, penetrate new market segments and win new businesses. In recent months, the Group has added several new customers and projects across all the business segments. These new programmes are expected to contribute to the Group’s performance starting next year.

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