Venture Corporation earnings set to boom in FY14

Growth imminent as customer wins loom.

Venture Corporation reported lower-than-expected earnings in 3Q13, which could lead to flat earnings in FY13, but DBS is optimistic on the company's growth prospects next year.

"FY13 earnings may be flat but new customer wins and market share gains to propel FY14 growth. Venture is cautiously optimistic of improving results in 4Q13. However, FY13 earnings would still be flat to weaker y-o-y," said DBS.

"Hence, we have marginally tweaked down FY13/14F by 3%. Looking into FY14, we are positive of Venture’s new customer additions and market share gains across several of its business segments. We believe varied opportunities with new customers and cost containment measures including lower rents will pave the way for growth new year," it added.

DBS also noted how Venture has managed to boost net margins to 6% during 3Q13 from 5.3% in 3Q12 and 5.1% in 2Q13.

"Margin improvement was ahead of our expectations and attributable to effective cost management and lower tax rate. Venture was successful in renewing pioneer tax status for several of its entities this quarter and expects to conclude more tax applications in the future quarters," said DBS.