Transport giant ComfortDelGro posted a 12.4 per cent rise in first-quarter earnings to $82.5 million despite a dip in revenue.
The profit growth for the period to March 31 was fuelled by lower costs and a huge increase in investment income - from $3.2 million to $13.7 million. This arose mainly from a special dividend from Cabcharge Australia, which was tax-exempt. If not for this dividend, ComfortDelGro's operating profit would have shrunk by 8.1 per cent to $100.5 million.
Revenue slid by 2.4 per cent to $972 million largely on foreign exchange translation losses led by the weaker British pound.
Group operating expenses shrank by 1.7 per cent to $871.5 million despite increases in major cost components such as staff, depreciation and fuel and power.
Taxes fell by 14.6 per cent to $18.7 million because of the tax-exempt Cabcharge dividend.
On a per share basis, earnings rose from 3.41 cents to 3.83 cents, and net tangible asset per share went from 114.77 cents to 121.08.
AT A GLANCE
REVENUE $972 million (-2.4%)
EARNINGS $82.5 million (+12.4%)
ComfortDelGro's operating margin before interest, tax and depreciation improved marginally to 20.9 per cent, from 20.6 per cent.
Overseas businesses accounted for 38.4 per cent of group operating profit, compared with 41 per cent in last year's first quarter.
All of the group's transit and non-transit business units posted smaller operating profits. The taxi business bore the brunt in absolute terms with a $4.7 million drop to $33.8 million despite lower benefits paid to cabbies in Singapore - a sign that private-hire rivals are beginning to eat its lunch. The group paid cabbies $13.2 million in benefits, down from $15.5 million.
ComfortDelGro remained strong financially, with total liabilities falling by $38 million to $1.89 billion as at end-March. This was mainly from lower trade and other payables and lower long-term borrowings. It posted a net cash outflow of $140.1 million after paying for a 49 per cent interest in ComfortDelGro Australia.
As at end-March, the group had short-term deposits and bank balances of $639.2 million, down from $887.9 million. After accounting for borrowings of $391.3 million, the group had a net cash position of $247.9 million.
Its gross gearing ratio was 12.8 per cent, up from 10.8 per cent as at end-December last year.
Directors expect the public transport businesses in Singapore to post higher revenue under the government bus contracting model. Rail revenue will be higher with ridership growth.
They expect its Australian bus business to see revenue growth but the British business to dip because of a weaker pound. Revenue from its bus station business in Guangzhou is expected to be lower with competition from China's growing high-speed rail network.