MAINBOARD-LISTED vehicle inspection company Vicom : WJP 0% on Friday (Aug 11) reported a net profit of S$13.9 million for the half year ended Jun 30, climbing 6.3 per cent from S$13.1 million the corresponding year-ago period.

This was due to higher interest income earned from the period, the group said. Interest income for the period leapt 500 per cent to S$978,000, from S$163,000. 

Revenue increased 4.8 per cent year on year to S$55.9 million, contributed by higher business volume. 

Earnings per share for the period was $0.0393, up from S$0.037.

The group’s operating costs rose to S$39.3 million, 6.8 per cent higher than H1 FY2022. This was due to higher staff costs and a lower write-back of allowance for expected credit losses. 

Vicom declared an interim dividend of S$0.0275, payable on Aug 29.

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The group, however, revised its dividend payout ratio from 90 per cent of net profit attributable to shareholders to 70 per cent, in view of the capital expenditure required for its expansion plans. This includes an investment in a new testing and inspection centre at Jalan Papan. 

The group maintains a cautious outlook for the year as it expects demand for vehicle testing to remain stable, while demand for non-vehicle testing is likely to slow down in tandem with the economy. 

An increase in the Certificate of Entitlement quota for cars will also result in a higher demand for new car registration and emissions testing services. 

Vicom’s chief executive Sim Wing Yew said: “The pressure on profit margin due to these factors remains a concern.”

The company also recently acquired An Security, which provides information technology security evaluation and testing services for cybersecurity products. 

“With rising threats in our digital era, we expect this to be a new growth area,” he added. 

Shares of Vicom ended Friday at S$1.66, down S$0.03 or 1.8 per cent, before the results.