Despite a contraction in one of its key industries, Vicom WJP has reported a 5.4% y-o-y increase in its net profit for the FY2023 ended Dec 31, at $27.6 million.
The company’s earnings per share increased 5.4% y-o-y to 7.78 cents, from 7.38 cents in the same period a year before.
Its revenue increased by 3.3% y-o-y to $111.9 million from $108.3 million, while its operating profit increased marginally to $33 million from $32.7 million previously.
With the interim tax-exempt one-tier dividend of 2.75 cents paid on Aug 29, 2023, the total dividend for 2023 will be 5.50 cents per ordinary share, representing a payout ratio of 70% if the final dividend is approved by shareholders at the Annual General Meeting on Apr, 24, says the company.
In 2023, the company completed the acquisition of An Security, a player in security evaluation and testing services for IT products.
It has also developed its new Jalan Papan site, an “important base” for them to expand their vehicle and non-vehicle testing capabilities.
The company notes that Singapore’s economic growth dropped to 1.1% in 2023, compared to 3.8% in 2022. Particularly, the manufacturing sector, one key industry for the non-vehicle testing business, contracted by 4.3%, “affecting our overall business performance”, says Vicom.
Despite this, the company says that the demand for vehicle testing and related work is expected to be strong, as it has been appointed by the Land Transport Authority (LTA) as one of the authorised partners for the installation of On-Board Units (OBU) in the Electronic Road Pricing (ERP) 2.0 exercise.
It expects demand for non-vehicle testing to also increase with the anticipated recovery of the manufacturing sector and possible improvement in the overall economy.
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“However, profit margins will continue to be under pressure due to inflation and greater competition. Barring unforeseen circumstances arising from global geopolitical tensions or headwinds, the company expects satisfactory performance in the year ahead,” says Vicom.
Shares in Vicom closed 2 cents higher or 1.40% up at $1.45.
