Venture's Q3 profits surge 134.8% to $111.37m

Its revenue for the quarter rose by 50.5% YoY to $1.1b.

Venture Corporation Ltd pops the champagne as its Q3 profits surged by 134.8% YoY to $111.37m.

According to its financial statement, revenue for the quarter rose by 50.5% YoY to $1.1b, whilst on a nine-month basis, it grew 44.5% YoY to $2.92b.

OCBC Investment Research said the revenue was boosted by a diversified revenue base, continuing strong execution of customers’ programmes and deepening of its collaborative partnership with strategic customers.

Operating expenses also rose 43.4% YoY to $932.1m in Q3, due to changes in finished goods, work-in-progress and raw materials used, and employee benefits expense.

Here's more from OCBC Investment Research:

Consequently, Venture’s 9M17 PATMI came in above our expectations as it jumped 81.5% YoY to $229.8m, which formed 88.2% of our FY17 forecasts.

9M17 PBT and net margins improved remarkably by 2.0ppt and 1.6ppt to 9.5% and 7.9%, respectively, driven mainly by: 1) management’s impressive execution of its strategy to create value by collaborating with customers through R&D support, and 2) continuous efforts to increase productivity and efficiency in manufacturing lines.

Looking ahead, we believe Venture’s margins expansion seen for 9M17 is sustainable as it continues to pursue its strategy of value creation for its customers by engaging in research and development (R&D) work alongside its customers.

As a result, we expect Venture to continue to capture additional opportunities (e.g. new programmes across its existing customer base, new customers acquired etc.) to further grow its revenue, which will likely comprise higher proportion of design content. Since FY12, Venture’s 4Q earnings have consistently been the strongest in each financial year, and we expect this trend to continue in FY17.