Vicom raises dividend despite earnings dip

A vehicle undergoing high-idling test. ST VIDEO: KEVIN LIM

Vehicle inspection group Vicom has proposed a final dividend of 22.88 cents a share for the financial year ended Dec 31, 2017 - up sharply from 8.5 cents for 2016.

It must be noted that Vicom also declared a special dividend of 10 cents a share in 2016, taking the total payout for that year to 18.5 cents. Still, the 2017 payout will be 23.7 per cent higher than 2016's total.

Directors said if the dividend is approved at its annual general meeting on April 24, it will be paid on May 10.

The ComfortDelGro subsidiary posted a 5.9 per cent dip in net earnings to $26.5 million, as revenue slipped 4.1 per cent to $97 million.

Total operating expenses shrank by 3.2 per cent to $66.6 million.

Vicom posted net earnings per share of 29.9 cents, down from 31.77 cents previously.

Net asset value per share also slipped from 169.05 cents to 167.34 cents as of Dec 31, 2017.

Vicom attributed its weaker revenue to "lower business volumes".

As Singapore's vehicle population continues to age, and as cars beyond 10 years of age continue to increase in numbers, the frequency of inspections actually rises.

That Vicom is experiencing lower business volumes means motorists may be taking their vehicles to other inspection centres.

Christopher Tan

A version of this article appeared in the print edition of The Straits Times on February 10, 2018, with the headline 'Vicom raises dividend despite earnings dip'. Print Edition | Subscribe