Vicom's Q2 earnings fall on more vehicle deregistrations

Singapore

VEHICLE inspection and testing services provider Vicom has posted a 12.6 per cent drop in net profit to S$6.62 million for the second quarter as more vehicles were deregistered. Revenue for the three months ended June 30 fell to S$25.4 million, down 6.9 per cent from S$27.3 million a year ago due to lower business volumes, it said in a Singapore Exchange filing on Wednesday.

Operating costs fell 2.5 per cent to S$17.9 million, while operating profit shrank 16 per cent to S$7.5 million.

Earnings per share for the quarter fell to 7.47 Singapore cents, down from 8.55 cents a year ago.

A dividend of eight cents per share was declared, from 8.75 cents per share a year ago.

For the half year, Vicom clocked in revenue of S$50.8 million, down 8.7 per cent from S$55.6 million a year ago.

Profit for the period registered a 12.9 per cent drop to S$13.9 million, translating to earnings per share of 15.72 Singapore cents, down from 18.06 cents previously.

Operating costs fell 5.4 per cent to S$34.7 million, while operating profit dropped 15 per cent to S$16.1 million.

The firm's cash and cash equivalents for the period under review rose to S$95.8 million, up from S$90.5 million a year ago.

In the first three months of this year, 62,416 vehicles were deregistered, figures by the Land Transport Authority show. This is 35.7 per cent higher than the 45,995 vehicles deregistered 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," Vicom said in a statement. "Demand for non-vehicle testing services is not expected to improve with the continuing slowdown in the industries that we serve."

Vicom closed one cent up at S$5.91 on Wednesday before its results were released.