ComfortDelGro's Q2 net profit rises 5.3% to S$85.2m
Singapore
AIDED partly by lower operating costs, ComfortDelGro's second- quarter net profit grew 5.3 per cent to S$85.2 million from the preceding year.
For the three months ended June 30, revenue slipped 1.4 per cent year-on-year to S$1.02 billion, mainly due to an unfavourable foreign currency translation effect.
Actual revenue increased by S$3.1 million during the quarter but this was eroded by a negative S$18 million foreign currency translation effect, it said. Of this, the weaker pound accounted for S$13 million, the Australian dollar for S$2.9 million, the renminbi for S$2 million and the ringgit for S$0.1 million.
Group operating costs during the quarter fell 1.8 per cent to S$899.4 million as a S$1 million drop in operating costs was strengthened by a positive foreign currency translation effect of S$15.9 million. The actual decrease of S$1 million was due to lower fuel and electricity costs, lower materials and consumables costs, and lower payment for contract services.
As a result, operating profit edged up 1.7 per cent to S$122.9 million, despite being hit by an unfavourable currency translation of S$2.1 million.
During the quarter, finance costs fell 17.8 per cent to S$3.7 million due largely to lower interest expense in Australia with the repayment of borrowings.
Earnings per share inched up to 3.96 Singapore cents from 3.77 cents in the previous year.
For the half-year period, net profit was 6.8 per cent higher at S$158.6 million even as revenue inched marginally higher by 0.9 per cent to S$2.02 billion.
Comfort is proposing an interim dividend of 4.25 cents per share, up from 4 cents previously, to be paid on Aug 29.
Commenting on the outlook, Comfort said its bus revenue in Singapore is expected to be maintained, while revenue from the rail business is expected to increase with higher ridership from Downtown Line 2.
On Thursday, its unit SBS Transit announced it had entered into a contract with the Land Transport Authority under the Bus Contracting Model, which will kick off on Sept 1. SBS Transit will operate eight packages of bus routes with 196 services for S$5.322 billion. The contracts are from 2-10 years in duration.
Revenue from Comfort's bus station business in Guangzhou is expected to be lower with stiffer competition from the expanding high-speed rail network, while its taxi business is expected to maintain its revenue, Comfort highlighted.
Meanwhile, revenue from the automotive engineering services business is expected to be lower as the price of diesel sold to its taxi drivers is expected to remain low, while revenue from the inspection and testing services business is also expected to be lower.
On the other hand, costs - staff costs, in particular - are expected to increase.
The counter closed at S$2.86 on Friday, down six cents.
