Vicom posts 3% uptick in Q1 profit, notes ‘considerable’ inflationary pressures

VEHICLE inspection company Vicom’s group profit after tax and minority interest (Patmi) inched up by 3 per cent to about S$6.3 million for the first quarter ended Mar 31, 2022, from S$6.2 million in the year-ago period.

This was due to higher operating profit, which was offset partially by higher tax expenses, the mainboard-listed company said in a business update on Wednesday (May 11) evening.

Revenue rose 8.1 per cent on the year to S$26 million for the quarter, from S$24.1 million previously. The top line was mainly boosted by higher business volume in the non-vehicle testing business as it rode on the recovery phase of the Singapore economy.

Cash and cash equivalents as at March 2022 stood at S$78.9 million, up 4.6 per cent year on year. Vicom said this “healthy cash balance” will support its business growth and opportunities.

The company noted that its overall business for the non-vehicle testing segment continued to improve in the first quarter of this year, and is expected to mirror the trajectory of the Singapore economy.

“However, there are considerable inflationary cost pressures as a result of supply chain disruptions and shortages of labour,” it added.

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As for the vehicle inspection business, Vicom said it has largely been stable, although there was lower demand for new car registrations and emission testing services, as the worldwide shortage of microchips hindered vehicle productions.

Shares of Vicom finished unchanged at S$2.03 on Wednesday, before the business update was released.