On 21 February 2025, Venture Corporation Limited (“Venture”) have announced their full year result for FY2024. The financial performance for this financial year is weaker, though it is aligned with management disclosures over the last few quarters, where they expected a softer customer demand for 2024. Do note that they expect to see growth in 2025, on basis of onboarding new customers and leveraging on relationships with key partners. Investors will need to monitor if this translates to results in the next few updates.
One good thing for Venture is that their earnings per share continue to be higher than their dividend payout. This has allowed them to sustain their dividend yield, and at the same time increase their net asset value over the last few quarters. Venture also has a large cash balance at reporting date. This will build a stronger buffer for investors to have assurance.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Full Yearly Results
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | -9.6% | -3.9% |
| Rating | Unfavorable | Unfavorable |
Revenue for FY2024 has decreased by 9.6% to SGD2,735 million when compared to SGD3,025 million in the previous financial year. Management have disclosed this was mainly attributable to softer customer demand within the Group’s portfolio. The metric remains Unfavorable.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | -8.9% | No Update |
| Rating | Unfavorable | Unfavorable |
Earnings per share for FY2024 has decreased by 8.9% to SGD0.845 per share from SGD0.928 per share in the previous financial year. The decrease is smaller than the decrease in revenue, which according to management was due to higher interest income and a tight focus on operational efficiency. Nonetheless, this metric remains Unfavorable.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | -7.5% | -8.9% |
| Rating | Unfavorable | Unfavorable |
Cash flow generated from operations for FY2024 has decreased by 7.5% to SGD482 million as compared to SGD521 million in the previous financial year. The decrease was mainly due to the lower profit before income tax. The metrics remains Unfavorable.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | 21.8% | No Update |
| Rating | Favorable | Favorable |
Gearing ratio as of 31 December 2024 stands at 21.8%. This is computed using total assets of SGD3,699 million and total liabilities of SGD805 million. The metric remains Favorable.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 270.6x | No Update |
| Rating | Favorable | Favorable |
Interest coverage as of 31 December 2024 stands at 270.6 times. This is computed using profit before tax of SGD306 million and interest expense of SGD1.137 million. The metric is Favorable. The extremely high interest coverage is due to the Group has no external borrowings, which is a good position to be at in view of the current high-interest rate environment.
Price-to-book ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 1.26 | 1.32 |
| Rating | Unfavorable | Unfavorable |
Price-to-book (“P/B”) ratio stands at 1.26. This is computed using the closing share price of SGD12.60 as of 28 February 2025 and Net Asset Value (“NAV”) of the Group of SGD10.00 per share as of 31 December 2024. The metric remains Unfavorable as investors will be paying a significant premium for its assets.
Do note that for the last few quarters, Venture has been generating more than sufficient earnings per share to payout their dividend. This has allowed their NAV to continue to increase, which in turn lower the P/B ratio over the last few quarters.
Worth noting that Venture has cash and cash equivalents of SGD1,316 million and no borrowings at reporting date. With total ordinary shares of 290 million, this represents net cash of SGD4.53 per share.
As of 28 February 2025, the Market Capitalization is approximately SGD3,642 million.
Website: Yahoo Finance: Venture Corporation Limited (V03.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 3.97% | SGD 0.500 |
| 2024 | 5.95% | SGD 0.750 |
| 2023 | 5.95% | SGD 0.750 |
| 2022 | 5.95% | SGD 0.750 |
| 2021 | 5.95% | SGD 0.750 |
| 2020 | 5.95% | SGD 0.750 |
Although the Group does not have a formal dividend policy, it strives to pay dividends that are on par or higher than the previous year. Since FY2018, the Group has paid interim and final dividends. Barring unforeseen circumstances, the Group aims to declare dividends at sustainable rates.
With a payout of SGD0.500 per share in May 2025, this is similar to the dividend paid out for the calendar year 2024. The expected dividend payout for the calendar year 2025 would therefore be SGD0.750 per share.
With a closing share price of SGD12.60 as of 28 February 2025, this translates to a dividend yield of 5.95%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is Favorable as Venture is above.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
If using dividend yield of 6.25% as a benchmark, based on the dividend of SGD0.750 there is potential for Venture to see its share price drop by another 4.8% to SGD12.00. This may occur should interest rates and yield of safe assets increase.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 12.60 | – |
| 6.25% | 12.00 | -4.8% |
| 7.25% | 10.34 | -17.9% |
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | -9.6% | Unfavorable |
| Earnings per share | -8.9% | Unfavorable |
| Operating Cash Flows | -7.5% | Unfavorable |
| Gearing ratio | 21.8% | Favorable |
| Interest coverage | 270.6x | Favorable |
| Price to Book Ratio | 1.26 | Unfavorable |
| Overall | Neutral |
Overall, the metrics remains Neutral to invest in Venture. This financial year was a slower one for Venture, which was in line with management’s forecast at the start of the year. Management expects growth in 2025, which investors will need to monitor over the next few quarters if this translates to stronger financial performance.
Background
Established in 1989, Venture is a leading provider of technology services, products and solutions to over 100 global brands across the world. Headquartered in Singapore, they harness the collective strengths of their 12,000-strong team globally in differentiated capabilities spanning R&D, product industrialization, advanced manufacturing, supply chain solutions and product lifecycle management.
Over the years, they have built in-depth knowledge and differentiated capabilities in numerous technology domains. These include Life Science and MedTech; Lifestyle and Wellness; Smart Industrial; Test Measurement and Instrumentation; NextGen Communications and other breakthrough technologies.
With more than 5,000 products and solutions and over three decades of experience in advanced manufacturing technology, they will continue to expand into new technology domains through its collaborations with their customers and partners in selected ecosystems of interest.
Previous Post
Website: Venture Corporation Limited (SGX: V03): 2024 Third Quarter Business Update
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-DP