Covid-19 drags Vicom's half-time earnings down by 30% to $9.7m

Vicom reported that revenue fell by 22 per cent to $39.8 million for the six months ended June 30. ST PHOTO: LIM YAOHUI

SINGAPORE - The circuit breaker period, which brought vehicle inspection business down to a trickle, dragged Vicom's half-year profits down by 30 per cent to $9.7 million.

The vehicle inspection and testing unit of transport giant ComfortDelGro Corp reported on Wednesday (Aug 12) that revenue fell by 22 per cent to $39.8 million for the six months ended June 30.

Despite operating cost falling by 17 per cent to $28.4 million and the Government's Covid-19 relief of $3.8 million, the huge revenue lost during the stay-home period, from April to June, impacted the bottom line adversely.

During this period, only goods vehicles, buses, taxis, private-hire vehicles and motorcycles were allowed to be inspected. These formed a small proportion of the total vehicle population.

Vicom's earnings per share fell from 3.92 cents to 2.74 cents. Its net asset value per share stood at 33.72 cents, compared with 37.04 cents as at Dec 31, 2019.

Directors, however, expect things to improve.

For the vehicle testing business, the demand for periodic testing is expected to pick up with the end of the circuit breaker, although emission-testing for new cars will be impacted by the smaller supply of certificates of entitlement.

Profit margins are expected to be further trimmed as competitors bid more aggressively for a significantly lower volume of non-vehicle testing work.

Whether business recovers to pre-pandemic levels remains to be seen, they added.

They noted that their outlook "assumes that Singapore does not re-enter another circuit breaker".

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