SINGAPORE (Feb 13): Transport operator ComfortDelGro Corporation recorded a 4.9% decline in earnings to $301.5 million for the full year ended December, from $317.1 million a year ago.
This was on the back of an $88.6 million dip in revenue for FY17, which fell 2.2% to $3.97 billion amid an increasingly competitive environment, particularly in the taxi business segment.
Actual revenue decrease of $54.1 million was due largely to a drop in the taxi and automotive engineering services businesses, while an unfavourable foreign currency translation of $34.5 million further compounded the decline.
Full-year revenue for the taxi business fell 9.9% to $1.21 billion, largely due to increased competition, while revenue from the group’s inspection and testing services business declined 2.9% to $104.0 million in FY17.
The lower revenue was partially mitigated by a 3.6% improvement in full-year revenue from the public transport services business to $2.39 billion.
As at end December, cash and cash equivalents stood at $596.2 million.
ComfortDelGro has proposed a final dividend of 6.05 cents per share for FY17, the same as the final dividend paid a year ago.
Together with the interim dividend of 4.35 cents paid earlier, this brings the total dividend for FY17 to 10.40 cents per share, representing a payout ratio of 74.6%
“2017 was a very challenging year for the group, most notably in the taxi business. The intense competition from ride-hailing apps has taken a toll on traditional taxi businesses everywhere,” says Yang Ban Seng, managing director and group CEO of ComfortDelGro.
“But we have taken it in our stride and continue to strengthen our relationship with our driver partners and find ways to improve their earnings,” he adds. “The alliance that we entered into with Uber Technologies in December 2017 seeks to widen the revenue base for our driver partners and the group, as well as provide more mobility choices for our customers.”
See: ComfortDelGro and Uber finally join forces
Looking ahead, ComfortDelGro says it expects the operating environment to remain tough.
“We will actively look for opportunities to grow and expand the business, both in Singapore and overseas,” says Yang.
Shares of ComfortDelGro closed flat at $2.01 on Tuesday.