SINGAPORE (Aug 10): ComfortDelGro Corporation reported a 5.5% fall in 2Q earnings ended June to $75 million from $79.4 million a year ago.
2Q revenue increased by 5.4% to $941.1 million as the result of the aggressive expansionary policy that the group has embarked on.
Since the beginning of this year, ComfortDelGro has invested $269 million in various acquisitions, both locally and overseas.
Maiden contributions from new subsidiaries like National Patient Transport and Tullamarine Bus Lines in Australia as well as AZ Bus in Singapore helped boost topline figures.
The actual revenue increase of $46.2 million was further aided by a positive foreign currency translation effect of $1.8 million.
Revenue from the group’s public transport services business increased by 13.9% to $667.9 million on the back of growth in all three geographies – Singapore, Australia and the UK.
Group operating costs during 2Q grew by 6.5% to $831.6 million as an actual increase in operating costs of $48.7 million was compounded by a negative foreign currency translation effect of $1.7 million.
Revenue for the taxi business decreased by 12.0% to $184.7 million due to a smaller operating fleet.
Increases in actual costs came mainly from additional headcount needed to support the Seletar Bus Package in Singapore, higher mileage operated as well as newly acquired subsidiaries.
Revenue for the inspection and testing services business dipped by 1.2% to $25.3 million as the cessation of business in Beijing was partially offset by an increase in Singapore.
Group operating profit fell 2.1% to $109.5 million.
For the 1H ended June, group revenue increased by 3.2% to $1.82 billion while earnings fell by 12.7% to $141.3 million.
A tax-exempt one-tier interim dividend of 4.35 cents per share has been declared, representing a payout ratio of 66.7%.
In its outlook, ComfortDelGro says revenue from the public transport services business in Singapore is expected to be higher. Bus service revenue is expected to be higher with the commencement of the Seletar Bus Package in March and the Bukit Merah Bus Package in the fourth quarter of 2018.
While rail service revenue is also expected to be higher with a full year contribution from Downtown Line 3, the rail business will continue to be challenging due to the fare reduction which came into effect on Dec 29 2017 and rising operating and maintenance costs.
Revenue from the Australia bus business is expected to be higher while revenue from the UK bus business is expected to be maintained. The recent acquisition of new bus businesses in Singapore, Australia and the UK will contribute to overall revenue growth.
Revenue from the taxi business is expected to be maintained with stabilisation in Singapore and the recent acquisitions in China, Australia and the UK.
Year to date, shares in ComfortDelGro are up 18.4% to close at $2.38 on Friday.
