VICOM Ltd 3Q 2025 Business and Financial Update: Key Insights for Investors

Operational Highlights: Robust Growth Driven by OBU Project and Economic Expansion

VICOM Ltd delivered a strong operational performance in the third quarter of 2025, underpinned by sustained demand across its core service areas. A key driver this quarter was the continued momentum in the Electronic Road Pricing (ERP) 2.0 On-Board Unit (OBU) project. The company installed more than 78,000 OBUs during 3Q 2025, an increase from 71,000 units in the previous quarter, signaling accelerating execution and demand for this initiative.

Inspection services also posted solid growth, with demand bolstered by Singapore’s ongoing economic expansion, particularly within the manufacturing and construction sectors. This dual-engine growth model positions VICOM to benefit both from government infrastructure projects and cyclical upswings in related industries.

Financial Performance: Significant Upside in Revenue and Profitability

Income Statement Snapshots

• Revenue: For 3Q 2025, revenue soared to S\$41.6 million, up by S\$11.1 million or 36% year-on-year. Year-to-date (YTD) revenue reached S\$111.5 million, a robust increase of S\$24.7 million or 28% compared to the same period in 2024.
• Operating Profit: Operating profit for the quarter was S\$12.1 million, up S\$3.9 million or 47%. For the first nine months, operating profit totaled S\$31.0 million, up S\$6.0 million or 24%.
• PATMI (Profit After Tax and Minority Interest): PATMI for 3Q 2025 grew to S\$9.9 million, an increase of S\$3.1 million or 45% year-on-year. YTD PATMI came in at S\$25.4 million, up S\$4.5 million or 22%.
• EBITDA: EBITDA for the quarter was S\$14.2 million, up 37% year-on-year, underscoring strong cash-generating ability.

The main contributors to this outstanding financial performance were the OBU project and heightened demand in the testing business. However, the company also faced higher operating costs, up S\$7.2 million for the quarter and S\$18.7 million YTD, mainly due to increased fees and raw materials associated with the OBU rollout as well as higher subcontractor fees.

It’s important to note that while operating profit and PATMI rose sharply, these were partially offset by lower interest income and higher income tax provisions.

Balance Sheet Remains Robust Amid Growth Investments

• Cash & Cash Equivalents: VICOM ended the quarter with a strong cash position of S\$42.0 million, though this marks a decrease from S\$60.7 million at the end of 2024 primarily due to significant investments and dividend payouts.
• Other Current Assets: Increased by S\$8.4 million (up 42.8%), reflecting higher business activity from the OBU project.
• Non-Current Assets: Rose by S\$18.6 million (up 14.2%), mainly as a result of progress payments for the development of the Jalan Papan site.
• Total Liabilities: Up 7.8% to S\$74.1 million, with current and non-current liabilities both rising in line with increased project activity.
• Total Equity: Improved by S\$3.0 million or 2.1% YTD.

Cash Flow: Strategic Investments and Shareholder Returns

VICOM generated S\$9.8 million in cash from operating activities in 3Q 2025, and S\$29.1 million YTD. However, the company deployed significant cash for capital expenditures (S\$12.3 million in 3Q, S\$25.6 million YTD), including the Jalan Papan development, and distributed S\$11.0 million in dividends for the quarter (S\$21.6 million YTD). Net cash used during the quarter was S\$13.6 million.

While the cash balance declined, it is clear that VICOM is actively investing in its capacity and infrastructure to support continued business growth, while also maintaining shareholder returns.

Key Points for Shareholders and Potential Price-Sensitive Information

• OBU Project Momentum: The rapid scale-up and execution of the ERP 2.0 OBU project is a significant revenue driver and could have further upside if this momentum continues, potentially affecting future earnings and share price.
• Revenue and Profit Growth: The marked increases in revenue, operating profit, and PATMI are notable and may positively impact share valuation, especially as these are driven by both recurring and project-based revenues.
• Strong Cash Position and Investments: Despite a reduction in cash, VICOM’s ongoing investments in infrastructure (notably the Jalan Papan site) demonstrate a long-term growth strategy, which could be price sensitive as these assets come online.
• Dividend Commitment: Continued dividend payouts signal management’s commitment to shareholder returns, a positive for income-focused investors.
• Cost Pressures: Rising costs associated with OBU deployment and higher subcontractor fees are worth monitoring as they could impact margins if not managed carefully.

Conclusion

VICOM Ltd’s third quarter 2025 results underscore a period of robust growth, driven by strategic projects and strong demand in its core businesses. The company’s ability to deliver higher revenues and profits, while maintaining a strong balance sheet and ongoing shareholder returns, is likely to be well received by the market. The ERP 2.0 OBU project, in particular, stands out as a price-sensitive driver that could influence VICOM’s share price in the near term.

Disclaimer: This article is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. The information contained herein is based on the company’s 3Q 2025 business update, and while every effort has been made to ensure accuracy, the company or the author does not warrant its completeness or accuracy. Future performance may differ materially from past results.

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