ComfortDelGro Q1 profit increases 9.7% to $63.3m

Singapore

TRANSPORT operator ComfortDelGro posted a 9.7 per cent year-on-year increase in net profit to $63.3 million for the first quarter ended March 31, 2014.

Revenue rose 9.2 per cent to $950.8 million. The top line was boosted by growth across all business segments except for the car rental and leasing business, the land transport giant said yesterday. There was also a positive currency translation effect from the stronger British pound and Chinese yuan, which helped boost total revenue by $3.8 million.

Meanwhile, operating expenses were 9.6 per cent higher at $849.3 million owing to higher staff costs, higher fuel and electricity costs, higher payments for contract services and higher repairs and maintenance. While operating expenses rose by $70.1 million, unfavourable currency translations boosted this by $4.3 million.

As a result, operating profit edged up 5.8 per cent to $101.5 million, with the group's overseas operations accounting for 50.8 per cent of operating profit. Aside from Singapore, China and the United Kingdom, the group also has operations in Australia, Vietnam and Malaysia.

Earnings per share worked out to 2.98 cents, up from 2.74 cents previously.

Revenue from its bus business rose 13 per cent to $467.5 million, bolstered by strong overseas operations. SBS Transit, which recorded a 7.2 per cent increase in revenue, nonetheless turned in an operating loss of $4.7 million from its core bus operations, due to higher operating costs. Including advertising and rental operating profit, operating profit was up $700,000 at $2.7 million. In the UK, revenue increased by 62.8 per cent to $192.6 million due to the contribution from Metroline West - which was acquired last year in July - as well as a positive currency translation effect.

Revenue from the taxi business was up 7 per cent at $305.8 million due to broad-based growth, with the exception of Australia. In Australia, its taxi business saw revenue slump 18.6 per cent to $4.8 million because of the weaker Australian dollar.

Revenue for its rail business was up 18 per cent at $42.1 million, though the core rail business incurred an operating loss of $1 million, versus an operating profit of $400,000 previously, due to higher staff costs with the start up of the Downtown Line. Including advertising and rental, operating profit for the rail business slid 26.7 per cent to $2.2 million.

ComfortDelGro said that it expected revenue from its Singapore and UK bus businesses to increase, while revenue from its bus business in Australia is likely to fall.

Revenue from its rail business is expected to receive a lift from higher ridership and contributions from the Downtown Line, while revenue from its bus station business in Guangzhou, China is likely to remain flat.

Revenue from the taxi businesses in Singapore, China, Australia and the UK is expected to grow, while revenue from the taxi business in Vietnam is expected to hold, ComfortDelGro said.

But "cost pressures will continue to be felt throughout the group", it warned.

The counter closed at $2.12 yesterday, up eight cents.