VICOM Ltd 1H 2025 Financial Analysis: Robust Growth Driven by Project Upswing

VICOM Ltd, a leading provider of vehicle and non-vehicle inspection and testing services in Singapore, has released its unaudited condensed interim consolidated financial statements for the half-year ended 30 June 2025. The Group demonstrated notable year-on-year growth, underpinned by a surge in project-related revenue and steady performance from its core businesses. Below, we present a detailed analysis of key financial metrics, performance trends, dividend declarations, and outlook for investors.

Key Financial Metrics and Performance Table

Performance Highlights

• Revenue Growth: 1H 2025 revenue rose 24.1% YoY, driven by the On-Board Unit (OBU) project for ERP 2.0 and higher testing volumes in the manufacturing and construction sectors.
• Operating Costs: Up 29.1% YoY, mainly due to staff costs and OBU project-related subcontractor fees.
• Profit Growth: Net profit attributable to shareholders increased 10.2% YoY, while earnings per share (EPS) grew 10.3% YoY.
• Dividend: The Board declared a tax-exempt interim dividend of 3.10 cents per share, up from 2.80 cents in 1H 2024 and 3.00 cents for the final dividend of FY2024. The interim dividend will be paid on 26 August 2025, with the record date set for 19 August 2025.
• Cash Flow: Net cash outflow of \$5.1 million for the period, after paying dividends.
• Balance Sheet: Total equity increased to \$146.4 million (from \$142.5 million at 31 Dec 2024), driven by profit generation, partially offset by dividend and non-controlling interest payments. Total assets grew by \$6.5 million, mainly from capital expenditure at the Jalan Papan site.

Historical Performance and Trends

VICOM has maintained steady revenue and profit growth over the years, with a particular boost in the current period from project-based work (notably the OBU project). The Group’s core vehicle and non-vehicle testing services continue to exhibit resilience, supported by Singapore’s regulatory landscape and infrastructure developments.

Exceptional Items and Related-Party Transactions

• No material impairments or asset revaluations were reported.
• Allowance for expected credit losses saw a minor writeback of \$51,000.
• Related-party transactions mostly reflect normal business operations with the parent group (ComfortDelGro), including shared services, rental, and subcontractor fees. No guarantees or bad debt expenses were recognized for amounts owed by related companies.
• No mention of legal disputes, natural disasters, or significant corporate actions (e.g., buybacks, IPOs, divestments).

Outlook and Guidance

The Group expects satisfactory performance in the second half of 2025, underpinned by continued strong demand for vehicle testing and related work as the ERP 2.0 OBU installation progresses. Non-vehicle testing demand is projected to remain stable, but there is caution regarding the potential impact of US tariffs on manufacturing and broader macroeconomic uncertainties.

Chairman’s Statement

“The Group expects satisfactory performance in the 2nd half of 2025. Demand for vehicle testing and related work is expected to be strong, with the installation of On-Board Units (OBU) for the Electronic Road Pricing (ERP) 2.0 exercise in full swing. Demand for non-vehicle testing is expected to remain stable, but there is increased uncertainty regarding the effects of US tariffs on the manufacturing sector and the overall economy.”

The Chairman’s tone is cautiously optimistic, highlighting robust project momentum but also acknowledging external risks.

Conclusion and Investment Recommendation

Overall Assessment: VICOM Ltd delivered a strong financial performance in 1H 2025, with double-digit revenue and profit growth, steady dividend increases, and a robust balance sheet. The business remains cash-generative, with positive outlooks for its core activities and project-driven boosts. However, investors should monitor macroeconomic risks, particularly any slowdown in manufacturing or regulatory changes affecting testing volumes.

• If you currently hold VICOM shares: Consider maintaining your position. The company’s fundamentals are sound, dividend yield is attractive and rising, and project-driven tailwinds should sustain near-term earnings. Reassess if there are signs of sustained margin pressure or major project delays.
• If you do not currently hold VICOM shares: VICOM represents a stable, income-generating play with defensive qualities and project upside. Entry may be considered on pullbacks, especially if seeking exposure to Singapore’s infrastructure and regulatory-driven services sector. Monitor for any adverse macro shifts before committing.

Disclaimer: This analysis is based solely on information published in VICOM Ltd’s 1H 2025 financial report. It does not constitute investment advice. Please consult your financial adviser and consider your own risk tolerance before making investment decisions.

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