ComfortDelGro (CDG) has reported earnings of $78.5 million for its 1HFY2023, down 31.9% y-o-y, as the company booked a one-off disposal gain from sale of a London property in the year earlier period.

If the one-off gain of $30.5 million was excluded, earnings would have dropped 7.4% y-o-y in 1HFY2023.

However, the bottomline for 1HFY2023 was a sequential improvement of 35.8% over 2HFY2022’s $57.8 million, thanks to improved public transport performance in Singapore, Australia and the UK.

In a sign of strong rebound in recent months, 2Q2023 PATMI was up 39.3% over 1Q2023.

CDG reported a revenue of $1.86 billion in 1HFY2023, a marginal increase from the $1.84 billion in 1HFY2022.

“Despite headwinds in some parts of the business, our overall performance has recovered. We have also seen this recovery accelerate in 2Q2023, particularly in our core business of public transport and taxi and private hire,” says managing director and group CEO Cheng Siak Kian.

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“To sustain this momentum, we are exploring new growth opportunities beyond our existing core business, particularly in the areas of electrification and autonomous vehicles,” he adds.

In the taxi & private hire segment, operating profit improved q-o-q in 2QFY2023 to $25.9 million from $16.8 million in 1QFY2023, mainly due to lower taxi rental discounts in Singapore.

In 1HFY2023, the segment’s operating profit remained at $42.7 million, compared to $41.8 million in 2HFY2022.

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In 3Q2023, ComfortDelGro implemented a platform fee for rides booked via its Zig app, which is expected to contribute to the segment’s performance going forward.

CDG has declared an interim dividend of 2.90 cents per share, representing a dividend payout ratio of 80% of patmi. It has generally paid out 70%-80% of patmi as dividends over the years.

The group has updated its dividend policy to pay out at least 70% of PATMI going forward, from at least 50% of PATMI previously.

The group’s net cash position stands at $549.8 million, a decrease from the $653.4 million last December, as its 2022 final and special dividends totalling $91.4 million paid in 2QFY2023.

In its statement dated Aug 14, CDG notes that as inflation levels stabilize, public transport earnings are expected to continue to recover for the remainder of 2023 and continue to be supported by wages and energy indexation on public bus contracts.

The group expects its Singapore public transport revenues to remain stable, while its UK public transport revenues are expected to increase as contractual indexation mechanisms in place will partially compensate for previous cost increases.

They also anticipate contracts to be tendered for at significantly higher service fees to cater for cost increases.

For more stories about where money flows, <a class='gtm_see_also_3_inread' style='text-decoration: underline;' href='/section/capital?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>click here for Capital Section</a>

Meanwhile, its Australia public transport is expected to remain stable after New South Wales was successfully awarded regions four, 12 and 14 contracts, with new contractual terms commencing from 2Q2023.

Bus charter in Australia and coach services in the UK have mostly recovered after the relaxation of Covid-19 restrictions and are expected to remain stable, according to the group.

Shares in ComfortDelGro closed 1 cent higher, or 0.79% up at $1.27.

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