Vicom, which provides testing and inspection services for vehicles and business customers, has reported earnings of $24.5 million for FY2020 ended Dec 31 2020, down 13.8% from the preceding FY2019. 

Revenue in the same period was $86.5 million, down 16.6%. 

Vicom points out that without government reliefs of some $7.7 million, its operating profit of $21.6 million for 2020 was $12.6 million or 36.8% lower than 2019.

Even with the lower operating earnings, the company plans to pay a first and final dividend of 6.22 cents per share, vs final 6.07 cents, adjusted for share split, paid last year.

The company blames the weaker numbers to the pandemic, marked by the April-May lockdown in Singapore. 

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“With economic activity grinding to a halt especially during the Circuit Breaker period, Vicom’s operations for the year have been hard hit. This has been especially so for the non-vehicle testing business which is directly dependent on the level of economic activity in the country,” the company says.

SEE: Vicom posts 30.2% decline in 1H20 earnings to $9.7 mil

Going forward, Vicom expects demand for vehicle inspection is expected to remain strong with the implementation of periodic inspection for all licensed ride-hail and street-hail service providers under the “Point-to-Point Passenger Transport Industry Act” passed in August 2019. 

Under Phase 3, where the majority of businesses are back in action, the demand for non-vehicle testing is expected to improve, the company says.

However, “it remains to be seen whether it will recover to pre-COVID-19 levels or to a new normal,” it warns.

“Profit margins will continue to be under pressure due to greater competition for contracts and also higher manpower and compliance costs to deal with shortages of manpower and COVID-19 restrictions,” says Vicom.

“The outlook for the vehicle inspection and non-vehicle testing businesses assumes that the COVID-19 situation in Singapore remains under control and this will lead to gradual and further improvement of the business environment,” the company says.