ComfortDelGro's Q3 net profit down 2% to $78.5m

While the increased turnover was mainly attributable to ComfortDelGro's public transport services business, it was partially offset by decreases in the taxi and automotive engineering services divisions.
While the increased turnover was mainly attributable to ComfortDelGro's public transport services business, it was partially offset by decreases in the taxi and automotive engineering services divisions.ST PHOTO: KUA CHEE SIONG

Earnings hit by lower dividend payouts from Australian unit

Earnings dipped at transport giant ComfortDelGro in the third quarter on the back of lower dividend payouts from its Cabcharge Australia unit.

Net profit fell 2 per cent to $78.5 million for the three months to Sept 30, although revenue rose 8.5 per cent to $967.9 million.

The increased turnover was mainly attributable to its public transport services business, but was partially offset by decreases in the taxi and automotive engineering services divisions.

Earnings per share came in at 3.63 cents, down from 3.70 cents a year earlier, while net asset value per share dipped from $1.21 as of Dec 31 last year to $1.19 as of Sept 30.

No dividend has been declared, unchanged from the preceding year.

Chief executive and managing director Yang Ban Seng said yesterday: "Organically, our Singapore and overseas public transport business continued to do well with higher mileages operated."

He added that acquisitions made earlier in the year are starting to contribute. The group has invested over $450 million in new acquisitions globally this year.

Nonetheless, net profit for the nine months to Sept 30 fell 9.2 per cent to $219.8 million despite revenue growing 5 per cent to $2.8 billion. The group expects to reap greater revenue from its public transport services in Singapore and Australia.

  • AT A GLANCE

  • REVENUE: 

    $967.9 million (+8.5%)

    NET PROFIT: 

    $78.5 million (-2%)

Bus turnover here is tipped to grow with the commencement of the Seletar and Bukit Merah bus packages.

Rail revenue is also envisaged to be higher due to the full-year contribution from Downtown Line 3.

In addition, the fare adjustment of 4.3 per cent will take effect from Dec 29.

"While the operating environment is expected to remain competitive and challenging, costs will continue to be managed prudently," ComfortDelGro said, noting that it will continue to look out for acquisition opportunities.

On this note, the group said yesterday that it is setting up a US$100 million (S$138 million) corporate venture capital fund to focus on "incubation and investments in mobility technologies and solutions".

"Called ComfortDelGro Capital Partners, the fund will invest in technology start-ups that plug technology gaps, and address the impact of disruptive challenges to the group's core land transport business," the company said.

Mr Yang noted that the rationale for setting up the fund is to increase the group's leverage in partnerships with tech start-ups, giving it a pathway to "eventually acquire or monetise them".

ComfortDelGro shares closed down two cents, or 0.91 per cent, to $2.18, before the results were released.

A version of this article appeared in the print edition of The Straits Times on November 10, 2018, with the headline 'ComfortDelGro's Q3 net profit down 2% to $78.5m'. Print Edition | Subscribe