Higher costs, absence of one-off item drive Vicom earnings down

Vicom said its operating expenditure rose by 2.1 per cent to $69.5 million, lead by higher depreciation and amortisation.
Vicom said its operating expenditure rose by 2.1 per cent to $69.5 million, lead by higher depreciation and amortisation.PHOTO: VICOM INSPECTION CENTRE/FACEBOOK

SINGAPORE - Higher operating costs and the absence of a one-off item drove vehicle inspection firm Vicom's 2019 earnings lower.

Revenue for the year ended Dec 31, 2019, grew by 3.6 per cent to $103.7 million, but earnings attributable to shareholders fell by 18.1 per cent to $28.4 million.

Vicom said its operating expenditure rose by 2.1 per cent to $69.5 million, lead by higher depreciation and amortisation.

It also noted that there was a net one-off other income of $7.6 million in 2018 arising from the surrender of a lease at one of its properties. Excluding this, earnings for 2019 would have been 5 per cent higher.

Vicom expects headwind this year, with an expected economic downturn contributed by the developing coronavirus crisis dampening its non-vehicle inspection business.

Its core vehicle inspection business, however, should benefit from another record year of certificate of entitlement (COE) revalidations, where motorists extend the lifespan of their cars beyond 10 years.

These older cars are subject to more frequent inspections.

Directors are recommending a final dividend of 24.29 cents per share, versus 23.17 cents plus a special dividend of 8.62 cents in the previous corresponding period.