Vicom reports weaker 3Q21 profit compared to 3Q20, but better results if govt grants removed

It should be noted, however, that this was mainly due to lower Covid-19 grants from the government, because if the grants were stripped out, operating profit would have been 21% higher y-o-y.

Vicom received only $484,000 in grants in 3QFY2021, compared to $2.09 million in the same period a year ago.

---

See: Vicom reports 16.0% lower earnings of $6.2 mil for 1Q21

---

In its business update presentation, Vicom said the higher revenue was mainly from the recovery of the Singapore economy and the lower base after Circuit Breaker in 2Q 2020.

See also: Trump wins Republican nomination, setting up rematch with Biden

However, the recovery also meant higher business volume, which partly contributed to higher operating costs of $2.8 million more in 3QFY2021.

This was in tandem with lower Covid-19 government reliefs of $1.6 million in the Jobs Support Scheme, waivers and rebates of the foreign worker levy.

As for its 9MFY2021 results, the company recorded a 22% increase in revenue to $75.44 million and a 16% increase in operating profit to $22.88 million.

See also: OCBC posts record net profit of $7.02 billion for FY2023, up 27% y-o-y; plans final dividend of 42 cents

If government grants were stripped out, Vicom would have recorded a 54% jump in operating profit, from $13.79 million in 9MFY2020 to $21.18 million in 9MFY2021.

Separately, Vicom’s cash and cash equivalents for 9MFY2021 stood at $69.66 million, a 25% drop from the $93.19 million as at Dec 2020. This is still a “healthy cash balance to weather prevailing uncertainties,” the company says.

Vicom explained that this was mainly from dividend payments and capex, offset by cash generated from operations.

Capex increased $1.2 million y-o-y in 9MFY2021, mainly from the purchases of machinery & equipment for new capabilities as well as for replacement.

Shares of Vicom closed flat at $2.07 on Nov 9.