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SINGAPORE (Sept 9): ComfortDelGro Corporation (CDG) posted $78.5 million in earnings for the 3Q ended Sept, representing a 2% decline from earnings of $80.1 million a year ago due to lower dividends received from its overseas subsidiary, Cabcharge Australia.
Revenue for the quarter grew 8.5% on-year to $967.9 million from $891.7 million, driven by increased contributions from new acquisitions.
Operating costs rose 9.5% to $854.5 million due to higher staff costs incurred from the support of SBS Transit’s Seletar Bus package, as well as higher mileages operating and new services & staff costs from newly-acquired subsidiaries, among others.
Despite the lower bottomline on a y-o-y basis, CDG’s managing director and group CEO Yang Ben Sang says the group’s Singapore and overseas public transport business continues to do well with higher mileages operated in the recent quarter.
“Our inorganic growth has been strong. The acquisitions earlier in the year have started to contribute. For this year, we have invested over $450 million in new acquisitions in Singapore, Australia, the United Kingdom and China. We will continue to be on the look out for opportunities to grow the business,” he adds.
Separately, CDG says it intends to establish a US$100 million ($137.7 million) global venture capital fund called ComfortDelGro Capital Partners (CCP) to incubate and invest in mobility technologies and solutions that complement, as well as provide new strategic capabilities to, the group’s land transport business.
Specifically, CCP will invest in technology start-ups that “plug technology gaps and address the impact of disruptive challenges” to the core land transport business, says CDG in a press release on Friday.
It will also focus on next-generation mobility companies which are in the midst of raising their seed-stage Series A or Series B funding rounds.
The fund will be managed at an arms-length basis with its own set of decision-making, approval and funding processes.
Aside from pursuing immediately profit-accretive investments, CCP is also expected to enable the CDG to pursue long-cycle opportunities in selected technology start-up companies.
According to Yang, it will also help to increase the group’s leverage in partnerships with technology start-up companies by giving CDG a pathway to eventually acquire or monetise them.
“While we continue to pursue bolt-on acquisitions of our core land transport and related businesses, there is a need for us to develop and acquire new mobility technologies and solutions which will not only build on our strong foundations, but also enable us to branch out into new annexes,” comments Yang.
Shares in CDG closed 2 cents lower at $2.18 on Friday.