ComfortDelGro Q1 net profit halves on weak ridership amid virus outbreak

Singapore

THE net profit for transport giant ComfortDelGro Corporation 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, ComfortDelGro said that various countries are now making plans to unravel their lockdowns. Nevertheless, 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.

In Singapore, its public bus and rail ridership figures have fallen by 70 to 75 per cent during the "circuit breaker" period.

In the UK, the frequency of its public bus services has been reduced to "weekend levels".

Revenue for the first quarter slid 9 per cent year-on-year to S$862.4 million, owing to declines across its three largest revenue generating business segments: taxi, automotive engineering and public transport services.

Singapore remains the largest revenue contributor by geography, accounting for 59 per cent of overall revenue.

ComfortDelGro said its public transport services business in the UK was affected by bad weather and the impact of the virus outbreak on tourism.

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, revenues were affected by rental relief schemes for drivers as well as by lower call centre volumes. ComfortDelGro had in February announced a package of rental rebates for its cabbies in Singapore. In China, taxis were "virtually rent-free" for drivers due to rental reliefs imposed by local governments but borne by operators.

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 buses in Australia and towards fleet replacements in the UK.

ComfortDelGro 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.

Shares of ComfortDelGro, trading cum-dividend, closed down 3.15 per cent at S$1.54.