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ComfortDelGro Q3 net profit down 2% to S$78.5m

COMFORTDELGRO Corp has posted a net profit of S$78.5 million for the third quarter, down 2 per cent from S$80.1 million a year earlier, on the back of lower dividend payouts from its subsidiary, Cabcharge Australia. 

On a per share basis, earnings for the three months ended Sept 30 came in at 3.63 Singapore cents, down from 3.70 Singapore cents a year ago.

No dividend has been declared for the current financial period, unchanged from the preceding financial year. 

With increased revenue from its existing businesses and contributions from new acquisitions, revenue for the quarter rose 8.5 per cent to S$967.9 million. The growth in revenue was mainly attributable to its public transport services business, partially offset by decreases in the taxi business, and the automotive engineering services business.

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Said group CEO and managing director Yang Ban Seng: "Organically, our Singapore and overseas public transport business continued to do well with higher mileages operated."

Mr Yang added that the group's inorganic growth has also been strong, with acquisitions earlier in the year starting to contribute. For the year, the group has invested over S$450 million in new acquisitions globally.   

Nonetheless, for the nine months ended Sept 30, net profit fell 9.2 per cent to S$219.8 million, even as revenue grew 5 per cent to S$2.8 billion. Earnings per share for the period stood at 10.16 Singapore cents, down from 11.20 Singapore cents in the year-ago period.

Looking ahead, the group expects greater revenue from its public transport services in Singapore and Australia. 

Within the Singapore market, bus revenue is expected to grow with the commencement of the Seletar Bus Package, and the Bukit Merah Bus Package. Rail revenue is also envisaged to be higher due to the full-year contribution from Downtown Line 3. In addition, the fare adjustment of 4.3 per cent approved by the Public Transport Council will take effect from Dec 29 onwards.

"Whilst the operating environment is expected to remain competitive and challenging, costs will continue to be managed prudently," ComfortDelGro said. The group added that it will continue to look out for acquisition opportunities. 

On this note, the group on Friday also said that it is setting up a US$100 million corporate venture capital fund to focus on "incubation and investments in mobility technologies and solutions". 

"Called ComfortDelGro Capital Partners (CCP), the fund will invest in technology start-ups that plug technology gaps, and address the impact of disruptive challenges to the group’s core land transport business," the company said. 

Mr Yang noted that the rationale for setting up the fund is to increase the group's leverage in partnerships with tech start-ups, giving them a pathway to "eventually acquire or monetise them". 

Separately, the group also pointed out in an exchange filing on Friday that Gan Juay Kiat, who is currently CEO of SBS Transit, will concurrently assume the role of group officer for bus business at ComfortDelGro. 

Shares in ComfortDelGro closed down 0.91 per cent, or two Singapore cents to S$2.18 apiece on Friday, before the release of its financial results.