Vicom Q1 profit up 8% to S$6.9 million on higher operating profit, interest income

VEHICLE inspection company Vicom posted a 8 per cent rise in profit after tax and minority interest for its first quarter ended Mar 31, 2023, from S$6.3 million in the year-ago period.

This was due to higher operating profit — which more than offset the higher operating costs due to increases in staff costs — as well as higher interest income, the mainboard-listed company said in a business update on Thursday (May 11) evening.

Revenue rose 6.6 per cent on the year to S$27.8 million for the quarter, from S$26 million previously, mainly due to higher business volume in its non-vehicle testing business.

The company said it has a “healthy cash balance” of S$59.6 million to support business growth and opportunities.

While inflationary pressures have begun to ease in the quarter, it remains elevated, and business costs are still high – particularly material, utility and staff costs, said Vicom.

Its vehicle inspection business has “largely been stable”, though there was a lower demand for new car registrations or emission testing services as a result of low Certificate of Entitlement quota.

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On the other hand, its non-vehicle business continues to improve, along with the recovery of the aerospace, construction, marine and offshore, as well as oil and gas industries. “However, there are signs of slowdown in the Singapore economy due to the wider macro environment,” it added.

Shares of Vicom closed S$0.02 or 1.1 per cent lower at S$1.82 on Thursday, before the results were announced.