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Extended rental relief measures worth $80 mil to push ComfortDelGro Taxi into the red in FY20

Uma Devi
Uma Devi3/30/2020 12:39 PM GMT+08  • 3 min read
Extended rental relief measures worth $80 mil to push ComfortDelGro Taxi into the red in FY20
As taxi drivers rejoice at news of an extended relief package worth $80 million, investors should brace themselves as the group prepares to report a full-year loss for the very first time since 2003.
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SINGAPORE (Mar 30): Taxi drivers are rejoicing as ComfortDelGro moves to extend its daily rental relief till September 2020 in a bid to cushion the impact of Covid-19.

But on the flipside, investors are about to be hit hard as ComfortDelgro Taxi is expected to sink into the red for FY2020 ending December, marking the first time Singapore’s largest taxi operator will post full-year losses.

ComfortDelGro taxi hirers are now receiving a total of $46.50 daily in rental relief for each taxi. This comprises $36.50 from the company, and $10 from the government’s Special Relief Fund (SRF).

The relief amounts from ComfortDelGro was initially intended to be reduced gradually in April and May as the impact of Covid-19 tapers off on both the company and broader economy.

However, the group realised that the worsening economic conditions and enhanced virus measures have made it “imperative” that more help be extended to its drivers.

As such, the company is moving to match the SRF amount of $10 till September, and depending on prevailing conditions, has also sounded its intention to extend the additional $26.50 daily relief amount till then.

In summary, hirers can expect to receive an unchanged amount of $46.50 per taxi on a daily basis from now till end-September should the situation not improve.

While this is likely to ease the impact of lower ridership and revenue for taxi drivers, the move is expected to set ComfortDelGro back by some $80 million, which will push the taxi operator into the red for FY2020.

Yet, ComfortDelGro Taxi CEO Ang Wei Neng has a clear message to send out to cabbies and investors alike: The company is going to do whatever it takes to ease the impact on its employees.

“Our priority is our cabbies’ survival. The dramatic drop in tourist arrivals, the increased number of people working from home, the enhanced measures to restrict crowds at shopping malls and eateries as well as the closure of nightspots, are having a massive impact on our cabbies,” says Ang.

“It is unprecedented. Our cabbies are part of the ComfortDelGro family and we want to help them continue to put food on the table,” he adds.

Apart from the relief extension, ComfortDelGro will also pass on all savings from its license fee waiver and the $2,200 awarded by the government for each unhired taxi to its drivers through a waiver of the call levy till September.

“All these are over and above the $1,000 per month that the government is giving to self-employed persons over the next nine months,” says the group.

As at 12.30pm, shares in ComfortDelGro are trading four cents lower, or 2.58% down, at $1.51. The counter has tumbled some 30% since the beginning of the Covid-19 outbreak in Singapore.

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