Venture reaps unexpected double gains as USD roars and MYR falters

Its earnings are poised to rise even higher.

USD and MYR movements have brought unanticipated good news to the manufacturing company as it is set to benefit from a weakened MYR due to its Malaysia-denominated staff costs while earning more in its U.S.-denominated sales.

Analysts from DBS said each 2% decline in MYR and 1% rise in USD would result in a 1.5% and 1% positive impact on Venture’s profits, respectively.

“In constant currency terms, we expect Venture to register 4-5% earnings growth in FY16F as some of the weaker segments such as PC, Printing and Imaging have already declined to just 20% of the group's revenue,” DBS said.

However, Venture saw its tax burdens rise as a result of expiring tax exemptions.

“As a result, the rate is expected to rise to about 14% from FY15F onwards versus sub-10% levels last year,” DBS said.