Led by a higher volume of testing services provided, Vicom WJP has reported earnings of $26.2 million for FY2022, up 5.7% over the preceding year. Revenue in the same period was up 7.3% to $108.3 million.
Vicom says that higher demand was seen for non-vehicle testing services with the pandemic easing and economic activities back to normal. Sectors singled include construction, marine and offshore, oil and gas and manufacturing.
However, Vicom warns that while the demand for the group’s services was strong, intense competition and high inflation rates continued to put pressure on profit margins.
“The group has managed to turn in a strong performance for the year, riding on the recovery resulting from the resumption of economic activities,” says Vicom CEO Sim Wing Yew.
“However, the outlook is uncertain for the year ahead, amidst a backdrop of high inflation and slower economic growth. We will continue to drive revenue growth and at the same time, manage costs tightly in 2023,” he adds.
The company plans to pay a final dividend of 3.32 cents per share, which, will bring the total for FY2022 to 6.64 cents, which translates into a payout ratio of 90%.
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For the current FY2023, Vicom expects demand for vehicle testing to remain stable in 2023, led by new car registration and emissions testing services as a result of the increase in the Certificate of Entitlement quota.
In addition, demand for non-vehicle testing is expected to increase with the full resumption of economic activities.
Nonetheless, Vicom warns that its margins will continue to be under pressure because of inflationary pressure and stiffer competition, especially in the non-vehicle testing business segment.
“The group maintains a cautious outlook for the year ahead,” says Vicom
Vicom shares closed Feb 21 at $1.90, unchanged for the day.
