Venture Corp suffers waning customer loyalty
The 19.9% profit fall sees a slower recovery in 2H as there is less visibility from customers.
According to OCBC, Venture management highlighted that it was more difficult to get a firmer visibility from customers, although there would still be new product launches, mainly from networking and communications, industrial and life sciences towards end 2012.
Here's more from OCBC:
2H recovery could be slower than previously expected. While we maintain our belief that FY12 would be a back-end loaded year for VMS, we opine that the recovery momentum in 2H would be less robust than we had previously expected. This stems from increasing cautiousness amongst key customers against the backdrop of the ongoing macroeconomic uncertainties.
Venture Corp’s (VMS) 2Q12 revenue declined 2.7% YoY to S$611.8m, but this was within our expectations. PATMI fell 19.9% YoY to S$33.6m. This came in below our expectations due to lower-than-expected margins, attributed largely to a change in product mix as 2Q12 saw stronger volume sales from lower-margin products. PATMI was also boosted by a S$3.2m gain on disposal of available-for-sale investments. Sequentially, topline grew 6.5% but bottomline declined 5.3%. For 1H12, revenue of S$1,186.1m represented a YoY fall of 2.5%, or 46.1% of our original FY12 projection. PATMI dipped 16.8% to S$69.1m, forming 40.1% of our full-year estimates.