ComfortDelGro posts 1.2% rise in 2Q earnings to $75.9 mil on acquisition-led revenue increase

SINGAPORE (Aug 13): Land transport operator ComfortDelGro Corporation saw its earnings edge up by 1.2% to $75.9 million for the 2Q19 ended June, from $75.0 million a year ago.

Earnings per share climbed to 3.50 cents on a fully diluted basis in 2Q19, compared to 3.46 cents in 2Q18.

2Q19 revenue rose 4.2% to $980.8 million, from $941.1 million a year ago.

The increase was mainly due to contributions from new acquisitions in its Public Transport Services Business, partially offset by a decrease in its Taxi Business.

Revenue from the group’s Public Transport Services Business grew 7.9% to $723.8 million. On top of contributions from its new acquisitions in Australia, ComfortDelGro also reported higher fees earned with higher mileage operated from bus services and higher average fares following the 4.3% fare adjustment in December last year as well as higher ridership from rail services in Singapore.

Revenue from the group’s Taxi Business shrank 8.3% to $166.9 million, mainly due to a smaller operating fleet.

Operating costs of $865.8 million for 2Q19 were 4.1% higher than a year ago, led by a 7.2% increase in staff costs and a 5.7% rise in repairs and maintenance costs.

Operating profit grew 5.0% to $115.0 million during the quarter, on the back of contribution from new acquisitions.

As at end June, cash and cash equivalents stood at $553.2 million.

Looking ahead, ComfortDelGro says it expects revenue from its Public Transport Services Business in Singapore to continue to rise, despite significant cost pressures from operating and maintenance costs.

Bus service revenue is also expected to be higher, with full year contribution from the Seletar and Bukit Merah Bus Packages, which commenced in March 2018 and November 2018, respectively.

Rail service revenue is also expected to be higher on the back of higher ridership and the 4.3% fare increase.

Meanwhile, revenue from the Taxi Business is expected to be lower amid the continuing keen competition.

“We will continue to look for value accretive acquisitions, including those in adjacent sectors. At the same time, we have been exploring new avenues of growth through technology-driven businesses,” says Yang Ban Seng, managing director and group CEO of ComfortDelGro.

“While not immediately profit-accretive, these strategic tieu-ps are crucial in ensuring that we position ourselves for the future,” he adds.

Shares in ComfortDelGro closed 10 cents lower, or down 3.7%, at $2.62 on Tuesday before the results announcement.