ComfortDelGro's first-half profit rises by 30% to $119m on exceptional gain

ComfortDelgro said that economic activity in all the countries it operates in picked up during the last six months, except for China. PHOTO: ST FILE

SINGAPORE - Transport giant ComfortDelGro posted a 30.4 per cent rise in earnings to $118.7 million for the six months ended June 30, boosted by a one-off exceptional gain.

Revenue rose by 6.7 per cent to $1.86 billion as world economies emerged from the Covid-19 pandemic. Operating expenses rose by 4.8 per cent to $1.68 billion.

The Singapore-based global group said that with the exception of China, economic activity in all the countries it operates in picked up during the last six months. The sale of Alperton garage in Britain and government relief helped to bolster earnings.

Earnings per share stood at 5.48 cents, up from 4.2 cents during the same time last year. Net asset backing per share stood at 125.26 cents, from 124.9 cents previously.

Directors are recommending an interim dividend of 2.85 cents and a special dividend of 1.41 cents.

ComfortDelGro chairman Lim Jit Poh said: "The group is in a fortunate position to have a strong cash flow and be in a net cash position. As such, we do not have any problem funding our dividend payouts internally.

"With the exceptional gain from the sale of the Alperton property in London, we have decided to pass on the net gain from that sale to our shareholders. This is something we will continue to do going forward when we make extraordinary gains and have no urgent need of the proceeds."

The group’s public transport services division fared significantly better, with operating profit increasing by 48.8 per cent to $122.8 million. Its taxi business’ operating profit grew by 18.4 per cent to $21.2 million. 

Its automotive engineering division, which includes fuel sales to cabbies, saw a 16.1 per cent decline in operating profit to $4.7 million. Its vehicle inspection business posted an 8.6 per cent rise in profit to $16.5 million, while its driving centre business had a 10.9 per cent dip in earnings to $9 million. 

The group’s car rental division posted a profit of $1.7 million, unchanged from previously. But its bus station business incurred a loss of $300,000, from a profit of $1.6 million. 

As at June 30, cash and equivalents stood at $970.5 million, from $892.8 million previously. The group said no provision for impairment was made for taxi vehicles, taxi licences, goodwill and investment in subsidiaries for the period.

In its outlook, ComfortDelGro said there is “uncertainty over the effectiveness” of public transport fare formulas “in the long term should high energy prices persist”.

In Singapore, it said its public transport business will be affected by an amendment to a reduction in the service fee payable by the Land Transport Authority on five bus contracts from Sept 1, 2022, as part of an agreement to move the Downtown MRT Line to a new financing framework.

Rail ridership in Singapore, bus charter in Australia and coach services in Britain are continuing to recover, but taxi revenue in China will continue to be heavily impacted by the country’s zero-Covid-19 policy, it pointed out.

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