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Vicom's Q1 net profit falls 13.2% to S$7.3m

VICOM saw its net profit fall in the three months ended March 31, 2016, by 13.2 per cent on year to S$7.3 million, as more vehicles were de-registered.

The vehicle inspection and testing services provider said on Tuesday evening that its first quarter total revenue fell by 10.4 per cent to S$25.4 million "due to lower business volumes".

Operating costs fell 8.3 per cent to S$16.8 million, while operating profit dipped 14.1 per cent to S$8.5 million.

As a result, the group's earnings per share fell from 9.50 Singapore cents in Q1 2015 to 8.25 Singapore cents in Q1 2016. No dividend was declared.

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Vicom's lower profits came as more vehicles were de-registered.

In the first three months of this year, 32,177 vehicles were de-registered, figures by the Land Transport Authority show. This is 45.2 per cent higher than the 22,168 vehicles de-registered in the same period last year.

"Demand for vehicle testing services will continue to be impacted as more vehicles will be deregistered during the year. Demand for non-vehicle testing services is not expected to improve with the continuing slowdown in the industries that we serve," said Vicom.