ComfortDelGro reports 1Q19 net profit rose 6 percent on new acquisitions

ComfortDelGro taxiComfortDelGro taxi

This article was ortiginally published on Tuesday, 14 May 2019 at 17:15 SGT; it has since been updated. 

ComfortDelGro reported Tuesday its first quarter net profit increased 6.2 percent on-year to S$70.4 million on contributions from new acquisitions.

Revenue for the quarter ended 31 March rose 7.8 percent on-year to S$947.3 million, the taxi, rail and bus operator said in a filing to SGX after the market close.

New acquisitions in late 2017 and in 2018 accounted for S$54.7 million in revenue for the first quarter, the filing said.

Operating profit increased 12.2 percent on-year in the quarter to S$107.4 million, but the weaker Australian dollar, British point and Chinese yuan trimmed S$1.7 million off the total, ComfortDelGro said.

“The robust first quarter’s results show growth from the new acquisitions as well as existing businesses. The acquisitions we made in the last year have started to reap returns and we expect that they will continue to do so,” Yang Ban Seng, managing director and group CEO of ComfortDelGro, said in the statement.

“We will continue to grow our core businesses, look at investment opportunities and explore new areas for growth, particularly in those that leverage on technology and strengthen our core expertise,” he added.

In the public transport services segment, revenue increased 11.6 percent on-year to S$684.9 million for the quarter, with 70.4 percent of the total from acquisitions, particularly in Australia,  ComfortDelGro said. It added it saw organic growth from higher fees due to increased bus mileage and higher ridership and average fare from rail services.

Taxi revenue fell 3.8 percent on-year to S$171.9 million, the filing said.

“Booking volume for the Singapore taxi business is holding steady. Conversion of older diesel taxis with high Certificate of Entitlement premiums to new hybrid taxis will continue and this will result in tax and depreciation savings,” the company said. “A voluntary profit-sharing scheme was implemented and a dynamic fare pricing scheme was launched to better match demand and supply.”

But it added, the overseas taxi business remained “challenging,” with “keen competition” and currency weakness.

In its outlook, ComfortDelGro said it expected Singapore public transport revenue to grow, with the full-year contribution from the Seletar and Bukit Merah bus packages boosting bus-service revenue.

It projected Australia bus revenue would rise with the full-year contribution from last year’s acquisitions, while U.K. bus revenue would be maintained.

 

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