Vicom’s Q3 earnings up 45% as it installs more OBU units in Singapore vehicles

Demand for vehicle inspection services was also strong, buoyed by Singapore’s economic expansion

Mainboard-listed Vicom posted S$9.9 million in net profit for the third quarter ended Sep 30, up 45 per cent from the year-ago period.

The vehicle-inspection company’s revenue rose 36 per cent in Q3 to S$41.6 million, lifted by its installations of on-board units (OBUs) in vehicles, as part of Singapore’s refreshed Electronic Road Pricing (ERP) system.

These devices, part of a satellite-based system replacing the gantry system, provide real-time traffic information and enable ERP.

Vicom installed over 78,000 OBU units in Q3, up from 71,000 units in the previous quarter.

The company said in a business update on Monday (Nov 10): “At the same time, inspection services also saw strong demand, buoyed by Singapore’s ongoing economic expansion, particularly in the manufacturing and construction sectors.”

It added: “The group continued to perform well in the quarter, supported by sustained demand across its core service areas.”

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However, the OBU installations pushed up operating costs by 32 per cent to S$29.5 million, due to higher fees and the cost of raw materials related to the project.

The company’s bottom line was also dampened by lower interest income and higher provision for income tax.

For the nine months to September, Vicom’s net profit rose 22 per cent to S$25.4 million; its revenue was up 28 per cent to S$111.5 million.

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The company had S$70.1 million in cash and other current assets as at end-September. Current liabilities stood at S$38.3 million, up 10.7 per cent, due to the OBU project.

The strong balance sheet will “sustain and support business growth”, said Vicom.

The company’s shares ended Monday at S$1.59, down by S$0.01 or 0.6 per cent, before the news.