Earnings at transport giant ComfortDelGro Corp inched up in the second quarter with increased revenue offsetting financial hits elsewhere.
Earnings came in at $75.9 million for the three months to June 30, up 1.2 per cent on the same period last year.
The group noted yesterday that higher public transport takings and contributions from new acquisitions were partly offset by lower investment income, increased financing charges and unfavourable exchange rates.
Revenue at the Singapore-based group rose 4.2 per cent to $980.8 million while operating costs went up by 4.1 per cent to $865.8 million.
Net profit for the half year was 3.5 per cent higher at $146.3 million.
Its public transport businesses accounted for the lion's share of earnings in the first six months, with operating income of $117.9 million - more than half the total of $222.4 million. The taxi business was a distant second with $57.9 million in operating profit.
Earnings per share for the second quarter stood at 3.51 cents, up from 3.47. Net asset backing per share was 118.83 cents, down from 120.7 as at Dec 31, 2018. Margin before tax, interest and depreciation improved to 22.6 per cent, from 22 per cent same quarter last year.
An interim dividend of 4.5 cents has been declared, up from 4.35 cents last year.
AT A GLANCE
REVENUE: $980.8 million (+4.2%)
OPERATING COSTS: $865.8 million (+4.1%)
INTERIM DIVIDEND PER SHARE: 4.5 cents
Chief executive Yang Ban Seng said: "Despite an intensely competitive operating environment and growing global economic uncertainty, we continued to grow the business in the second quarter...
"This was largely due to the strong contributions from the new businesses that we acquired last year and robust growth of the public transport services business."
He said ComfortDelGro has been "exploring new avenues of growth through technology-driven businesses", noting: "Whilst not immediately profit-accretive, these strategic tie-ups are crucial in ensuring that we position ourselves for the future."
ComfortDelGro recorded a net cash outflow of $69.9 million for the second quarter. It had short-term deposits and bank balances of $553.2 million as at June 30.
After accounting for borrowings of $637.4 million, the group had a net debt position of $84.2 million, representing a net gearing ratio of 2.8 per cent compared with a net cash position of $16.2 million as at Dec 31. Its gross gearing ratio was 21.4 per cent as at June 30, versus 18.8 per cent as at Dec 31.
Directors expect revenue from public transport in Singapore to continue rising, but added that "cost pressures from operating and maintenance" will persist.
Revenue from its Australian bus business is expected to be higher, with a full-year contribution from acquisitions made last year as well as the acquisition in May of bus operator B&E Blanch.
Turnover from the British bus business should be maintained but the contribution from taxis is expected to be lower "amidst continued keen competition".