VICOM Ltd Reports Strong Q3 2024 Financial Performance with Key Growth in Vehicle Inspection and Non-Vehicle Testing Businesses

VICOM Ltd has released its business update for the third quarter of 2024, showcasing significant growth and strong financial performance in both its vehicle inspection and non-vehicle testing businesses. Shareholders should take note of the following key points which could potentially impact share values.

Operational Update

Vehicle Inspection Business

The demand for vehicle testing and related work remains robust. The On-Board Unit (OBU) project for the Electronic Road Pricing (ERP) 2.0 exercise is progressing smoothly, with over 41,000 OBUs installed since the project’s commencement.

Non-Vehicle Testing Business

The non-vehicle testing business has seen improved demand in the quarter, driven by the expansion of Singapore’s manufacturing sector. However, rising costs and intense competition continue to pose significant challenges.

Financial Update

Income Statement Highlights

Revenue for Q3 2024 stood at \$30.5 million, a 12% increase from Q3 2023, primarily due to the OBU project that commenced in December 2023 and increased demand for vehicle emission testing services. Operating costs rose by \$3.0 million due to higher subcontractor fees, raw materials, and staff costs associated with the OBU project. Consequently, operating profit was up by \$0.3 million. Profit after tax and minority interest (PATMI) increased by \$0.3 million, primarily due to higher operating profit.

Year-to-Date (YTD) Performance

For the nine months ending September 30, 2024, revenue increased by \$3.7 million compared to the same period in 2023. Operating costs rose by \$3.1 million, resulting in a higher operating profit of \$0.6 million. PATMI saw an increase of \$0.5 million, despite a higher provision for income tax.

Balance Sheet and Cashflow

VICOM Ltd’s balance sheet remains strong, with cash and cash equivalents totaling \$55.2 million. Current liabilities decreased by \$2.4 million, mainly due to lower trade and other payables.

Cash generated from operating activities for Q3 2024 was \$9.9 million. Utilization of cash included \$9.9 million in dividends to shareholders, \$2.4 million in CAPEX, and \$0.4 million in payments under lease liability. The net cash used during Q3 2024 was \$0.7 million.

Financial Summary

Revenue for Q3 2024 was higher by \$3.3 million, reaching \$30.5 million. Operating profit increased by \$0.3 million to \$8.2 million, and PATMI rose by \$0.3 million to \$6.8 million. The company’s strong balance sheet, with a cash balance of \$55.2 million, supports sustained business growth. However, net cash of \$0.7 million was used during Q3 2024.

The continual growth in both vehicle inspection and non-vehicle testing businesses, alongside a strong financial position, indicates a positive outlook for VICOM Ltd. Shareholders should monitor these developments closely, as they have the potential to impact the company’s share value positively.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Readers are advised to seek independent professional advice before making any investment decisions.

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