Vicom's earnings up 2.9% to $6.2 million

Home-grown vehicle inspection group Vicom posted a 2.9% increase in earnings to $6.2 million for the second quarter that ended on 30^th June. Revenue for the company, owned by transport giant ComfortDelGro Corp, grew by 2.4% to $24.7 million.

The results brought Vicom's first-half net earnings 2.6% higher to $13.3 million, on the back of a 2% rise in revenue to $49.2 million. Total cost incurred in the second quarter crept up by 1.3% to $17.3 million.

Earnings per share stood at 7.05 cents, up from 6.85 cents in the second quarter of last year. Vicom was more profitable in the quarter as its margin before tax, interest and depreciation rose from 35.5% to 36.1%. Its net asset value per share stood at 159.48 cents, down from 167.34 cents.

There was a net cash outflow of $15.2 million in the three-month period on account of dividend payment. Cash and equivalents stood at $97.9 million, down from $100.9 million.

Directors expect revenue to be affected in the coming quarters. The recent fall in Certificate of Entitlement (COE) prices to their lowest levels in nearly a decade has resulted in the premature deregistration of cars with higher COE premiums before the 10-year mark. "This is expected to affect the demand for the vehicle-testing business," Vicom said in a statement. "The non-vehicle-testing business continues to face intense competition, but is expected to remain stable."

That notwithstanding, directors are declaring an interim dividend of 13.46 cents per share, up from 13.12 cents at the same time last year. This will be paid on 24^th August.