Lower oil prices lift Q3 profit for ComfortDelGro

ComfortDelGro Corp's third-quarter operating costs fell by 3.3 per cent due to factors such as lower diesel and power cost and less benefits disbursed to taxi drivers.
ComfortDelGro Corp's third-quarter operating costs fell by 3.3 per cent due to factors such as lower diesel and power cost and less benefits disbursed to taxi drivers. ST FILE PHOTO

Earnings up 2.5% despite dip in revenue; buses and taxis remain biggest profit generators

Fuelled by lower oil prices and other expenses, transport giant ComfortDelGro Corp posted a 2.5 per cent rise in third-quarter earnings to $87.3 million, even as its revenue dipped.

For the nine months to Sept 30, the Singapore-based multinational firm reported a 5.2 per cent rise in net profit after tax to $245.9 million.

Revenue slipped 3.1 per cent to $1.02 billion in the three months, and 0.5 per cent to $3 billion in the nine-month period.

Operating costs in the third quarter shrank by 3.3 per cent to $888.2 million, driven mostly by lower diesel and power cost, lower materials and consumables cost and less benefits disbursed to taxi drivers.

Earnings per share for the three months stood at 4.05 cents, up from 3.97 cents in the corresponding period last year.

Net asset value per share stood at 110.25 cents, up from 108.6 cents.

  • AT A GLANCE

  • NET PROFIT: $87.3 million (+2.5%)

    REVENUE: $1.02 billion (-3.1%)

For the quarter, overseas markets accounted for 41.3 per cent of ComfortDelGro's operating profit, with Britain and Ireland being the biggest contributors, followed by Australia and China.

Directors said third-quarter revenue would have been $15.5 million higher if not for foreign exchange translation losses of $47.9 million.

Likewise, operating costs actually rose by $12.4 million, but were offset by a favourable foreign currency translation of $43 million.

Of its various business segments, buses and taxis remained its biggest profit generators.

Bus and related businesses contributed an operating profit of $50.6 million, 12.5 per cent lower than the same quarter last year.

Taxis contributed $47.3 million, 1.5 per cent higher than previously.

Automotive engineeering, which includes diesel sales to cabbies, contributed $15.4 million by posting the biggest gain of 51 per cent when compared with last year.

ComfortDelGro's rail business, operated by SBS Transit, contributed $800,000, down 20 per cent from last year.

Its vehicle inspection business, operated by Vicom, contributed $8.5 million, down 5.6 per cent.

Among these, the vehicle inspection business was the most profitble with a 31.6 per cent operating margin - more than double the overall margin of 12.5 per cent.

The group recorded a net cash outflow of $67.5 million, largely because of service fee payments yet to be received.

As at Sept 30, ComfortDelGro had short-term deposits and bank balances of $705.3 million. After accounting for borrowings of $446.3 million, it had a net cash position of $259 million. Its gross gearing ratio was 14.5 per cent, down from 18.5 per cent at Dec 31.

Its stock closed unchanged at $2.46 yesterday.

A version of this article appeared in the print edition of The Straits Times on November 12, 2016, with the headline 'Lower oil prices lift Q3 profit for ComfortDelGro'. Print Edition | Subscribe