Venture profit elevates by 7.5% to $36.1m in Q2

Only to be spoiled by declining net margin.

The manufacturing firm continues to ride on its efficient cost management and driving productivity management to publish constant robust results, but increasing tax expense is stalling the party.

Tax expense grew by 65.9% to $6.2m, dragging the company’s net margin down to 5.5%.

“6.4%. For 1H15, VMS’ PATMI, which formed 44.5% of our FY15 forecasts, grew 6.7% YoY to S$68.6m on the back of a 6.5% increase in revenue to 1.27b,” a report from OCBC said.

“1H15 saw steady YoY growth across all the business segments of VMS with the exception of Printing & Imaging (P&I) segment, which is within our expectations,” the report added.

Meanwhile, Venture expects more compelling growth for the next half, especially on their life sciences segment.

“Also, margins in this segment are likelyto be higher with more value-adding services. While no large upswing expected, we believe VMS will be able to sustain steady revenue growth and possibly better gross (more value-adding work) and PBT margins (cost management, productivity gains and improving efficiency) going forward,” the report said.