ComfortDelGro profits up but its S’pore bus operations incur losses
- POSTED: 13 Feb 2014 19:20
- UPDATED: 14 Feb 2014 00:31
ComfortDelGro reported on Thursday a 5.7 per cent rise in 2013 net profit but said its Singapore bus operations lost money for a third consecutive year.
SINGAPORE: Transport operator ComfortDelGro has booked record full year revenue for 2013 at S$3.75 billion.
But its public bus operations in Singapore continued to struggle, falling into the red for a third consecutive year.
ComfortDelGro grew both its topline and bottomline in 2013.
Revenue climbed 5.7 per cent to a record S$3.75 billion while net profit rose by also the same margin to S$263.2 million.
Operating profit for the group's taxi business was S$146.2 million in 2013, up 3.6 per cent from a year ago.
Its public bus operations under SBS Transit, however, continued to weigh on growth, registering an operating loss of S$14.3 million in the year.
This is likely to remain in the red despite the impending fare hike.
SBS Transit’s chief executive officer Gan Juay Kiat said: "I do not think it's going to completely eradicate all the losses that we've incurred for the past business year in 2013. That's basically due to higher costs that we're going to be facing for 2014."
Edison Chen, investment analyst at DMG & Partners Research, said: "Both SMRT and SBS Transit are representing the local operating conditions, which are pretty challenging. They have to increase the quality of service, face escalating operating costs, whereas the fare hike will not come until April this year."
ComfortDelGro is one of the world's largest land transport companies with operations in six other countries, including the UK, Australia and China.
Its more profitable overseas business units have helped to offset the loss-making bus operations in Singapore.
Operating profit from its overseas bus business now account for 92.3 per cent of its group bus operating profit.
Overall, overseas contribution to its operating profit is 48.9 per cent in 2013, up from 46.2 per cent in the 2012.
ComfortDelGro also reported an operating loss of S$5.8 million for its rail business in Singapore, due mainly to higher manpower costs from the start-up of the Downtown Line.
Kua Hong Pak, managing director and group chief executive officer at ComfortDelGro, said: "So for Stage 1, we were projecting a ridership of 75,000, but currently it's running at about 53,000, after just a short while. So we are quite encouraged by the numbers."
Work on Downtown Line Stage 2 has been delayed due to an accident in 2012.
But when that phase is completed in 2016, ComfortDelGro expects both Stage 1 and 2 to have a combined daily ridership of 250,000.