Vicom posts steady Q1 results in period before circuit breaker

VICOM on Wednesday posted a flat net profit of S$7.3 million for its first quarter ended March 31. Its revenue held steady at S$25.3 million.

The vehicle-inspection group said this was because its inspection and testing services businesses had remained stable in the three months before the circuit-breaker measures took effect in April and May.

As at end-March, it continued to hold cash and cash equivalents of S$98 million. 

During the quarter, the company posted capital expenditure of S$1.6 million, compared to S$1 million a year ago, but, excluding the progressive payments for the addition and alteration works costing S$833,000 at its new Bukit Batok premises, capex would have been lower, as the group is  deferring non-essential capex to conserve cash.

To cope with the Covid-19 impact, Vicom's senior management and directors have taken voluntary cuts in pay and fees.

Operationally, vehicle inspections for goods vehicles, buses, taxis, private-hire cars and motorcycles have been occurring as per normal, but private cars due for inspection between April 7 and June 21 will have the check deferred for six months. Vicom's new-car registrations and emission-test laboratories, however, have been affected by the suspension of bidding for Certificates of Entitlement (COEs).

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Its non-vehicle testing business has been exempted from serving essential-service providers and key industries during the circuit-breaker period. However, the severe impact of the circuit breaker on its clients from the construction, oil and gas, aviation, and food and beverage sectors will have an impact on Vicom's activity levels, it said.

"Recovery from Covid-19 is expected to be gradual and mirror that of the economy closely."

Among government measures that will help the company is a co-funding of local employees' salaries through the implementation of the Jobs Support Scheme, and the waivers and rebates of levy for foreign workers. Business-support schemes with tax deferments/rebates and rental waivers granted by the government have also helped the firm.

On its part, Vicom has enhanced cleaning measures and stocked up on personal protective equipment. It has also deployed social-distancing ambassadors to remind staff and customers to practise safe distancing.

Its shares added two cents to S$7.98 on Wednesday.