Vicom Limited’s Latest Earnings: Revenue and Profit Decline, Again
Yesterday, Vicom Limited (SGX: V01) released its 2017 first quarter earnings. The reporting period was for 1 January 2017 to 31 March 2017.
As a quick background, Vicom is a leading provider of technical testing and inspection services with operations mainly in Singapore. ComfortDelGro Corporation Ltd (SGX: C52) owns a majority stake in Vicom.
You can catch up with Vicom’s 2016 fourth quarter earnings here.
The following’s a quick take on some of Vicom’s latest financial figures:
1. First quarter revenue came in at $24.1 million, down 4.9% from a year ago.
2. Net profit for the first quarter fell by 6.4% year-on-year to $6.9 million.
3. Earnings per share (EPS) was 7.73 cents in the reporting quarter, down over 6.3% from 8.25 cents in 2016’s first quarter.
4. Cash flow from operations was $6.3 million and capital expenditure was $513,000. The lower capex gave Vicom $5.9 million in free cash flow, down around 21% from the free cash flow of $7.3 million seen a year ago (based on cash flow from operations of $8 million and $656,00 in capital expenditures).
5. As of 31 March 2017, Vicom had $107.4 million in cash and equivalents and no debt. This is a minor increase from the net cash balance of $100 million recorded at the end of 2016.
In all, Vicom experienced another decline in revenue and profit during the first quarter of 2017. Lower business volumes was behind the lower revenue. Vicom’s free cash flow also fell, but its balance sheet remains strong.
Operational highlights and what lies ahead
There isn’t too much to look forward to at the moment. Vicom’s management sounded cautious in the company’s outlook statement:
“Business conditions are expected to remain challenging for the Group. The vehicle testing business will continue to be faced with the high de-registration rate although this will be offset partially by the increase in the number of Certificate of Entitlement (COE) revalidations.
The non-vehicle testing business will continue to weaken with the general slowdown in the industries that we serve.”
I had previously mentioned that the higher rate of vehicle deregistration may affect Vicom’s vehicle testing business.
At its closing share price of $5.70 yesterday, Vicom traded at 18.2 times trailing earnings and carried a trailing dividend yield of 4.7%.