On 14 May 2025, Venture Corporation Limited (“Venture”) have announced their first quarter business update for FY2025. The results for Venture this quarter was not a good start for FY2025 when comparing to FY2024. This is contrary to management’s earlier expectations to see growth in 2025, and resulted in the decrease in share price for Venture over the last few weeks.
Though there is a plausible reason, as management have disclosed that broad consensus amongst Venture customers that the ongoing tariff situation has created significant uncertainty in the global economic environment, with no clear visibility in the tariff landscape over the next 12 months. The ongoing economic uncertainties have caused instability to the market. Investors will need to monitor over the next few quarters on the extent of impact on Venture’s financial performance.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: General Announcement::Business Update for 1Q2025
Financial Highlights
Revenue
| Metrics | Current | Previous |
|---|---|---|
| Revenue | -7.5% | -9.6% |
| Rating | Unfavorable | Unfavorable |
Revenue for the first quarter of FY2025 has decreased by 7.5% to SGD616 million when compared to SGD666 million for the same period in the previous financial year. Management have disclosed that Group revenue declined largely due to lower demand in the Lifestyle Consumer technology domain, where Venture improved the reliability and longevity for customer’s key products through R&D design innovation, which led to lower product replacements. Excluding the Lifestyle Consumer technology domain, Group revenue for 1Q 2025 would have rose year-on-year. The metric remains Unfavorable.
Earnings per share
| Metrics | Current | Previous |
|---|---|---|
| Earnings per share | -6.8% | -8.9% |
| Rating | Unfavorable | Unfavorable |
Earnings per share for the first quarter of FY2025 has decreased by 6.8% to SGD0.193 per share as compared to the same period in the previous financial year. The decrease is less than proportionate than the decrease in revenue, as the Group improved its net profit margin to 9.1% through continued focus on cost efficiency and delivering higher value solutions through their differentiated capabilities. Nonetheless, this metric remains Unfavorable.
Operating Cash Flows
| Metrics | Current | Previous |
|---|---|---|
| Operating Cash Flows | No Update | -7.5% |
| Rating | Unfavorable | Unfavorable |
Based on the announcement on 14 May 2025, management have provided an update that net cash generated from operating activities amounted to SGD55.4 million for the first quarter of FY2025. However, no breakdown was provided for the same period in the previous financial year for comparison.
The metric remains Unfavorable as the net cash generated from operating this quarter is lower when extrapolated to the full calendar year and compared to the net cash flow generated from operations for FY2024 of SGD482 million. Furthermore, net cash generated from operations for FY2024 also saw a decrease by 7.5% to SGD482 million as compared to SGD521 million in the previous financial year.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing ratio | No Update | 21.8% |
| Rating | Favorable | Favorable |
Based on the announcement on 14 May 2025, no detailed breakdown of the financial position to determine the gearing ratio was provided in the business update for the first quarter of FY2025.
The metric was Favorable as of 31 December 2024 with a gearing ratio of 21.8%. This is computed using total assets of SGD3,699 million and total liabilities of SGD805 million.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | No Update | 270.6x |
| Rating | Favorable | Favorable |
Based on the announcement on 14 May 2025, no detailed breakdown of the financial results to determine the interest coverage was provided in the business update for the first quarter of FY2025.
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 | 1.09 | 1.26 |
| Rating | Neutral | Unfavorable |
Price-to-book (“P/B”) ratio became cheaper at 1.11. This is computed using the closing share price of SGD11.07 as of 30 May 2025 and Net Asset Value (“NAV”) of the Group of SGD10.11 per share as of 31 March 2025. The metric shifted towards Neutral as investors will be paying a smaller premium for its assets compared to the previous quarter update.
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.
No detailed breakdown of Venture’s financial position was provided in the business update for 31 March 2025. Worth noting that Venture has cash and cash equivalents of SGD1,316 million and no borrowings as of 31 December 2024. With total ordinary shares of 290 million, this represents net cash of SGD4.53 per share.
As of 30 May 2025, the Market Capitalization is approximately SGD3,187 million.
Website: Yahoo Finance: Venture Corporation Limited (V03.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 4.52% | SGD 0.500 |
| 2024 | 6.78% | SGD 0.750 |
| 2023 | 6.78% | SGD 0.750 |
| 2022 | 6.78% | SGD 0.750 |
| 2021 | 6.78% | SGD 0.750 |
| 2020 | 6.78% | 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 remain unchanged at SGD0.750 per share.
With a closing share price of SGD11.07 as of 30 May 2025, this translates to a dividend yield of 6.78%. For my benchmark, a general reasonable yield would be around 5.25%. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q2 – 5.25%
If using dividend yield of 7.25% as a benchmark, based on the dividend of SGD0.750 there is potential for Venture to see its share price drop by another 6.6% to SGD10.34. This may occur should interest rates and yield of safe assets increase.
| Yield | Share Price | Downside |
|---|---|---|
| Current | 11.07 | – |
| 7.25% | 10.34 | -6.6% |
| 8.25% | 9.09 | -17.9% |
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Revenue | -7.5% | Unfavorable |
| Earnings per share | -6.8% | Unfavorable |
| Operating Cash Flows | No Update | Unfavorable |
| Gearing ratio | No Update | Favorable |
| Interest coverage | No Update | Favorable |
| Price to Book Ratio | 1.09 | Neutral |
| Overall | Neutral |
Overall, the metrics remains Neutral to invest in Venture. Venture has started FY2025 on a weaker footing as compared to the previous financial year, although currently it is still generating sufficient earnings to sustain their dividend payout. With the current economic uncertainty around the world, investors will need to continue to monitor the financial performance of Venture and assess their risk appetite.
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.
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Website: Venture Corporation Limited (SGX: V03): 2024 Full Year Result
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