ComfortDelGro half-year results

Transport giant in red despite govt relief

Fall in public transport revenue and taxi turnover contribute to $6m first-half net loss

Government grants aimed at offsetting the fallout from the Covid-19 pandemic were not enough to prevent ComfortDelGro from incurring its first-ever loss.

The transport giant reported a net loss of $6 million for the six months ended June 30, compared with a net profit of $146.3 million for the same period last year.

ComfortDelGro said yesterday that it would have spilt a lot more red ink if not for Covid-19 relief from the Government.

It posted a loss of $75.7 million at the operating level before government relief. Aid amounting to $82.3 million allowed it to post an operating profit of $6.6 million.

Revenue fell by 20.8 per cent to $1.53 billion, while operating costs declined 10.8 per cent to $1.52 billion.

It incurred a loss per share of 0.28 cent, from earnings per share of 6.76 cents previously. Net tangible assets per share stood at 114.33 cents, from 119.8 cents as at Dec 31 last year.

Margins before interest, tax, depreciation and amortisation shrank from 22.5 per cent to 16.2 per cent.

In Singapore, lower public transport ridership and rental waivers for taxi drivers took a toll on its bottom line. The group said its operations in Australia, Britain, China, Ireland, Vietnam and Malaysia had also been "hard hit by the ongoing pandemic".

The greatest impact has been from lower public transport ridership and taxi demand, it noted.

Revenue from overseas for the first half was $677 million, or 44.3 per cent of group turnover, versus $805.1 million, or 41.8 per cent for the previous corresponding period.

Segmentally, ComfortDelGro's public transport revenue was 12.9 per cent lower at $1.23 billion.

In Singapore, lower public transport ridership and rental waivers for taxi drivers took a toll on its bottom line. The group said its operations in Australia, Britain, China, Ireland, Vietnam and Malaysia had also been "hard hit by the ongoing pandemic".

 
 

More unhired cabs drove taxi turnover down 47.2 per cent to $178.6 million.

Revenue from its automotive engineering division was 36 per cent lower at $82.1 million, due partly to the suspension of business during the circuit breaker period.

The same applied to its vehicle inspection, driving school and bus station divisions. The only exception was its vehicle rental business, which posted a 4.5 per cent rise in turnover to $13.9 million.

Despite the weaker performance, the group's financial position remained strong. Because of the unprecedented business environment, it made a rare interim provision for impairment on vehicles and goodwill of $30.8 million.

The group had cash and equivalents of $619.9 million, versus $553.2 million previously.

After accounting for borrowings of $546.1 million and lease liabilities from financial institutions of $95.7 million, it had a net debt position of $21.9 million, representing a net gearing ratio of 0.8 per cent, compared with 1.3 per cent as at Dec 31 last year. Its gross gearing ratio stood at 22.3 per cent compared with 21.1 per cent as at Dec 31.

The group said the future looks uncertain. "Governments have provided significant temporary relief for the near term, but the sustainability of such reliefs is uncertain," it said, noting that a number of cities have had to lock down again because infection cases resurfaced.

Revenues are expected to remain depressed and margins under pressure, it added.

Notwithstanding, ComfortDelGro's strong balance sheet allows it to "transform and build its capabilities while looking for growth opportunities in overseas markets".

Its directors are not recommending an interim dividend in the light of the situation. Last year, the company paid out 4.5 cents a share.

Chief executive Yang Ban Seng said that despite the prolonged crisis, it was able to continue running its businesses "without letting any of our staff go". The group has around 20,000 employees here and abroad.

A version of this article appeared in the print edition of The Straits Times on August 15, 2020, with the headline 'Transport giant in red despite govt relief'. Print Edition | Subscribe