Venture Corp's gains slide down 8.1% to S$32.6m

Still suffering waning customer loyalty.

According to OCBC, Venture Corp (VMS) reported a 4.3% YoY increase in its 3Q12 revenue to S$608.9m but PATMI declined by 8.1% to S$32.6m.

Here's more from OCBC:

Topline was within our expectations but bottomline missed due to weaker-than-expected margins. PATMI was also boosted by a S$1.6m gain on disposal of an associate, although this was partially offset by exchange losses amounting to S$1.1m.

Sequentially, revenue and PATMI fell by 0.5% and 3.1%, respectively. For 9M12, revenue of S$1,795.0m was marginally lower by 0.3% and formed 72.7% of our FY12 projections.

PATMI dipped 14.2% to S$101.7m, or 67.7% of our full-year estimates.

VMS highlighted that the sentiment amongst its customers remains cautious, given the weak end market demand in light of the ongoing macroeconomic uncertainties. We pare our FY12 revenue and PATMI estimates by 1.6% and 9.1%, respectively, as the seasonal 2H strength is unlikely to materialise this year. Our FY13 forecasts are unchanged.

Nevertheless, management sounded more upbeat about its FY13 product pipeline from both new and existing customers, and is seeking to further increase its market share gains from competitors with these customers.

This would however only yield meaningful contribution in FY13. We opine that investors should position themselves for the expected recovery in VMS’s business in FY13, and hence roll forward our valuations to 15x FY13F EPS.

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