Transport giant ComfortDelGro Corp posted a 5.5 per cent dip in net earnings to $75 million for the second quarter ending June 30.
In a statement to the stock exchange yesterday, the Singapore-listed company said revenue rose 5.4 per cent to $941.1 million, with higher operating expenses and losses from foreign exchange conversion eroding its profitability. Operating costs rose 6.5 per cent to $831.6 million, compounded by a negative foreign currency conversion effect of $1.7 million.
For the period, its core taxi business continued to be hit by competition from private-hire operators.
Together with the closely related automotive engineering division, the operating profit from its taxi business in the second quarter slid to $39.7 million, 20.4 per cent lower than the same period last year.
For the first half, ComfortDelGro's net profit slipped 12.7 per cent to $141.3 million, on the back of a 3.2 per cent growth in revenue to $1.8 billion.
Earnings per share for the second quarter stood at 3.47 cents, down from 3.67 cents. Its earnings before interest, tax and depreciation margin shrank from 24 to 22 per cent in the three months. Its net asset value per share dipped to 120.83 cents, from 121.01 cents on Dec 31.
The group posted a net cash outflow of $105.8 million for the second quarter, arising largely from dividend payout.
AT A GLANCE
REVENUE: $941.1 million (+5.4%)
NET PROFIT: $75 million (-5.5%)
As at June 30, its short-term deposits and bank balances stood at $529.5 million. After accounting for borrowings of $309.7 million, ComfortDelGro had a net cash position of $219.8 million.
Its gross gearing ratio was 10.3 per cent, down slightly from 10.6 per cent on Dec 31.
Although the year-on-year showing is down, ComfortDelGro chief executive Yang Ban Seng noted the second quarter was actually better than the first three months.
He attributed it largely to the continued growth of its bus and rail business, as well as the stabilisation of the taxi business in Singapore.
"With a more rational competition landscape, the recruitment of taxi drivers has improved, leading to a higher utilisation of the fleet," Mr Yang said of the local cab market. "To meet this growing demand, we are also expanding the taxi fleet.
"The new businesses that we acquired towards the end of last year and earlier this year in Australia, the United Kingdom, China and Singapore have started making their maiden contributions to revenue and profits."
He said "they will continue to do so going forward".
"The deal pipeline remains strong and we hope to conclude more deals in the coming months to grow the business," he added.
Since the start of the year, ComfortDelGro has invested $269 million in various acquisitions, both locally and overseas. Maiden contributions from new subsidiaries like National Patient Transport and Tullamarine Bus Lines in Australia as well as AZ Bus in Singapore helped boost topline figures.
Directors are recommending an interim dividend of 4.35 cents, unchanged from the same period last year.
They expect revenue from the taxi business to be maintained in the coming quarters, noting the group will take delivery of 200 new hybrid taxis this month, and have placed orders for 1,000 more, to be delivered by mid-2019.