ComfortDelGro profits fall 6.8% in second quarter

ComfortDelGro's taxi business suffered over the quarter, taking revenue hits in Singapore, Britain and China. However, revenue from its public transport services rose as subsidiary SBS Transit saw increased ridership.
ComfortDelGro's taxi business suffered over the quarter, taking revenue hits in Singapore, Britain and China. However, revenue from its public transport services rose as subsidiary SBS Transit saw increased ridership.ST FILE PHOTO

Transport operator hit by slower business, as revenue drops at taxi arm both here and abroad

ComfortDelGro has posted a net profit of $79.4 million for the second quarter, down 6.8 per cent from the same period a year ago, on slower business and negative currency conversions.

Revenue for the three months ended June 30 was $987.2 million, down 3.4 per cent from the same period a year earlier. The main drag was the taxi business, where revenue dipped 10.7 per cent year-on-year to $303.9 million.

The reason was lower rental income in Singapore from a lower operating fleet, the introduction of flexi-rental schemes and the passing on of the transport authority's diesel tax rebate to drivers in the form of taxi rental discounts.

In Britain, growth in the taxi business was "completely eroded" by the weaker sterling, said the group. Revenue from the China taxi business was hit by a lower double-shift rate, a government-mandated reduction in taxi rental rates and a weaker yuan.

Revenue from public transport services rose 1.3 per cent to $586.3 million, as SBS Transit's bus revenue rose following the transition to the bus contracting model from September last year. Rail revenue at SBS Transit was also lifted by higher ridership.

A negative foreign-currency translation effect of $18.2 million, arising mainly from a weaker sterling, dragged down the bottom line as well.

Operating profit fell 9 per cent from a year ago to $111.9 million.

  • AT A GLANCE

  • NET PROFIT: $79.4 million (-6.8%)

  • REVENUE: $987.2 million (-3.4%)

  • DIVIDEND: 4.35 Singapore cents (+2.35%)

Earnings per share came to 3.67 cents, down from 3.96 cents a year ago. Net asset value per share was 118.70 cents as at June 30, up from 114.77 cents as at Dec 31 last year.

An interim dividend of 4.35 cents per share will be paid on Aug 28, representing a payout ratio of 58.1 per cent. This is higher than last year's interim dividend of 4.25 cents.

Chief executive Yang Ban Seng said: "The group continues to face intense competition and challenges in the taxi segment, both in Singapore and overseas. The rapid growth of the private-hire industry, fuelled by incentives and subsided fares, is something that we continue to watch closely.

"We will intensify efforts and initiatives to retain our drivers and to search for new markets for more jobs for them. We are committed to remaining a dominant mobility service provider in the industry and will continue to seek growth overseas."

The group said it expects revenue in most business segments, including the taxi segment, to decrease. But revenue from the driving-centre segment will be maintained. Revenue from public transport services in Singapore and Australia is expected to increase.

The counter closed unchanged at $2.31 yesterday before the results were posted.

A version of this article appeared in the print edition of The Straits Times on August 12, 2017, with the headline 'ComfortDelGro profits fall 6.8% in second quarter'. Print Edition | Subscribe