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ComfortDelGro Q1 net profit halves on weak ridership amid virus outbreak
THE net profit for transport giant ComfortDelGro (CDG) fell 48.9 per cent on the year to S$36 million for the first quarter ended March 31, hit by weak ridership amid Covid-19 induced lockdowns in the markets in which it operates.
In its business update on Friday, CDG said that although various countries are now making plans to unravel their lockdowns, social distancing will continue and recovery is expected to be gradual.
The company added that lockdowns in Singapore, Australia and the UK will "significantly hurt" its H1 FY2020 business.
Revenue for the first quarter slid 9 per cent year on year to S$862.4 million, owing to declines in its three biggest segments: taxi, automotive engineering services and public transport services.
Singapore remains the largest revenue contributor by geography, accounting for 59 per cent of overall revenue.
CDG said the public transport services segment was affected by the weather and the impact of the virus outbreak on tourism in the UK. In Singapore, it was affected by fuel indexation due to low oil prices globally. In Australia, it was hit with a weaker Australian dollar.
As for the taxi business, the company had to grant a two-month rental waiver for its fleet in Singapore, to help its drivers through the crisis. In China, taxi rental was made almost free.
Net capital expenditure for the first quarter was S$48.1 million, down from S$79.7 million in the same period a year ago, with the spending going toward ongoing efforts to renew the taxi fleet in Singapore by replacing the vehicles with hybrid vehicles. The spending also went towards purchasing hybrid bus fleets in Australia and fleet replacement in the UK.
CDG said no new non-essential capital commitments are being made.
Separately, the company announced on Friday that independent non-executive director Ong Ah Huat was retiring after about seven years in the role. The 76-year-old gave his support to the company's board renewal plan. His role will be filled by Mark Christopher Greaves on May 23.
Mr Greaves, 63, is currently managing director at Anglo FarEast Group Consulting. He is also a director and deputy chairman at Hanson Capital Investments, Hanson Family Holdings and Hanson China Partners in London and Hong Kong.