Venture Corp’s profits jump 10.1% to $35.8m in Q1

Thanks to slower operating expense growth.

Venture Corporation Ltd (VMS)’ profit after tax and minority interests surged 10.1% to $35.8m in Q1, thanks to slower 3.1% growth of operating expenses.

According to a report by OCBC, the increase was registered despite a 15.6% jump in income tax expense to $6.6m.

VMS’ YoY improvement in PBT and net margins by 0.4ppt and 0.3ppt to 6.7% and 5.7% respectively was propelled by Test & Measurement/Medical & Life Science/Others (TMO) segment.

Looking ahead, VMS’ steady growth momentum is expected to persist, driven by its TMO segment, and especially its life science sub-segment. Management maintained that the strategy is still to bolster VMS’ engineering, as well as research and development capabilities to create value for customers. VMS will also continue to invest in new equipment to drive productivity.

“We believe such strategy of innovating and developing new products as well as improving existing products’ design alongside its customers will help improve its position to win market share steadily, compared to pure-play electronic manufacturing services (EMS) peers,” notes OCBC.

Further, the strategy allows VMS to sustain its margins through value creation, and produce more products efficiently with reduced headcount, resulting in sustainable growth.

OCBC also asserts that with a large portfolio of almost 200 customers across several industries, revenue growth will likely be broad-based as well.