ComfortDelGro's earnings in Q3 down by 10.8%

ComfortDelGro's taxi fleet here has shrunk to around 11,000 - its lowest in almost 20 years - since ride-hailing firms entered the market six years ago. The taxi business posted an operating profit of $27.4 million for the quarter, down from $33.5 mi
ComfortDelGro's taxi fleet here has shrunk to around 11,000 - its lowest in almost 20 years - since ride-hailing firms entered the market six years ago. The taxi business posted an operating profit of $27.4 million for the quarter, down from $33.5 million previously.PHOTO: LIANHE ZAOBAO

Weakening taxi business pulls net profit down to $70m, but group grows top line with overseas ops doing well

A still deflating taxi business in Singapore pulled ComfortDelGro's net earnings down by 10.8 per cent to $70 million for the third quarter ended Sept 30.

The transport giant's taxi fleet in the Republic has shrunk to around 11,000 - its lowest in almost 20 years - since ride-hailing firms entered the market six years ago.

Lower investment income also had an impact on the bottom line.

Group revenue rose by 1.1 per cent to $979 million, while operating cost inched upwards by 1.8 per cent to $870.1 million, with the highest increase coming from depreciation, which grew by 13.3 per cent to $104.8 million.

Earnings per share stood at 3.23 cents for the three-month period, down from 3.63 cents during the same period last year. Net asset value per share was 116.33 cents, down from 120.7 cents.

ComfortDelGro's margin before tax, interest and depreciation was slightly wider at 21.8 per cent, up from 21.3 per cent.

Chief executive Yang Ban Seng said: "The global economic and political environment has weakened further in the last few months, and this has weighed on our businesses, which continue to face intense competition.

  • AT A GLANCE

  • REVENUE: $979 million (+1.1%)

    NET PROFIT: $70 million (-10.8%)

"Despite the significant challenges, we have managed to grow our top line, with stronger contributions from our overseas businesses."

He said the group's Australian operations have "performed well", and the bus and rail units "continued to gain strength".

The CEO added that "we will continue to look out for investment opportunities and build on our strengths in the mobility sphere".

Segmentally, the taxi business posted an operating profit of $27.4 million for the quarter, down from $33.5 million previously.

Further decline is expected as the fleet shrinks amid continued competition from ride-hailing firms.

Buoyed by growing ridership and higher fares, the bus and rail business posted an operating profit of $59.4 million, up from $57.7 million.

Subsidiary SBS Transit reported a 1.5 per cent rise in net profit to $20 million for the third quarter, while revenue was 3.6 per cent higher at $364 million.

The group expects bus revenue to rise in the coming quarters, with full-year contributions from the Seletar and Bukit Merah route packages.

Higher rail revenue is expected with the 4.3 per cent fare increase from last year and the 7 per cent fare hike taking effect from Dec 28 this year.

ComfortDelGro reported a net cash outflow of $34.7 million for the quarter, and short-term deposits and bank balances of $518.5 million.

After accounting for borrowings of $633.8 million, it had a net debt position of $115.3 million, representing a net gearing ratio of 3.9 per cent compared with a net cash position of $16.2 million as at Dec 31 last year.

A version of this article appeared in the print edition of The Straits Times on November 14, 2019, with the headline 'ComfortDelGro's earnings in Q3 down by 10.8%'. Print Edition | Subscribe