Contract manufacturer Venture reported its second quarter net profit rose 40.2 percent on-year to S$97.9 million, despite lower revenue, as it posted lower expenses.
Revenue for the quarter fell 6.0 percent on-year to S$952.3 million, Venture said in a filing to SGX after the market close on Friday. Other operating expenses fell by 13.2 percent on-year in the second quarter to S$28.29 million, from S$32.6 million in the year-earlier period, Venture said.
In the year-earlier period, allowances for doubtful trade receivables were S$2.12 million, compared with S$8,000 in the second quarter of 2018, it said.
It reported a net margin of 10.3 percent for the second quarter, up from 6.9 percent in the year-earlier quarter.
“The group’s initiatives to leverage its core capabilities in R&D, advanced manufacturing to deliver deep value creation and drive operational excellence across the value-chain contributed to the improvement in profitability,” Venture said in the statement.
In the first half, net profit rose 53.3 percent on-year to S$181.6 million, while revenue fell 2.6 percent on-year to S$1.81 billion, it said.
Other operating expenses in the first half fell 14.9 percent on-year to S$56.14 million, from S$66.01 million, mainly on non-recurring charges in the year-earlier period and “judicious cost management,” it said. Its allowance for doubtful trade receivables was S$8,000 in the first half, down from S$5.85 million in the year-earlier period, Venture said.
The net margin rose to 10 percent in the first half, from 6.4 percent in the year-earlier period, Venture said.
Venture declared an interim dividend of 20 Singapore cents a share, compared with no dividend in the year-earlier period.
In its outlook statement, the company was cautious.
“While Venture has delivered a creditable first-half 2018 performance, some volatility may arise in the near term from customers’ M&A, new product/platform transitions and also from the possibility of escalation of trade war and component shortages. Venture and its partners have worked out various strategies to mitigate these issues,” it said.
But it added, “growth drivers across Venture’s broad-based portfolio of technology domains and strong supply chain management will provide resilience and stability to its long-term performance.”