Vehicle inspection services provider Vicom saw its earnings for 1H20 ended June fall 30.2% to $9.7 million from $13.9 million a year ago.
Revenue for the same period fell 22% y-o-y to $39.8 million due to lower business volumes impacted by the global pandemic.
As a result, earnings per share (EPS) for 1H20 stood at 2.74 cents compared to the 3.92 cents in the same period last year.
Operating costs for 1H20 fell 17.2% y-o-y to $28.4 million contributed by some $3.8 million in the government’s Jobs Support Scheme (JSS), as well as waiver and rebates on foreign worker levies and lower operating costs of $2.1 million.
Consequently, Vicom’s operating profit for the half-year period stood 31.9% y-o-y lower at $11.4 million.
Without the government reliefs, Vicom’s operating profit would have been 54.6% y-o-y lower at $7.6 million.
No interim dividend was declared for 1H20 in a bid to conserve cash amid the pandemic-induced uncertainties.
In comparison, the company declared an interim dividend of 3.5275 cents for 1H19.
Vicom says it will review the final dividend for FY20 at the end of the year.
As at end June, cash and cash equivalents stood at $80.8 million.
Looking ahead, Vicom expects the demand for periodic testing of vehicles to pick up following the end of the circuit breaker period.
However, the demand for emission testing and type approval of new cars will be negatively affected, as part of the quota for Certificates of Entitlement for the April-June 20 period is carried forward to the next calendar year.
The company says the pace of recovery for non-vehicle testing will be linked to the recovery of the local economy, particularly in key industries such as Construction, Marine & Offshore, Oil & Gas and Food & Bio-Chemistry.
Profit margins are also expected to be further trimmed as competitors bid more aggressively for a significantly lower volume of work available.
Shares in Vicom closed 1 cent higher, or 0.5% up, at $2.17 on Aug 12.
