ComfortDelGro sinks into the red with S$6 million loss amid 'massive' destruction caused by COVID-19
SINGAPORE: Transport giant ComfortDelGro posted a net loss of S$6 million in the first half of the year amid "massive" destruction brought on by the COVID-19 outbreak.
With governments around the world imposing lockdowns and other restrictions to stem the spead of the outbreak, demand for taxi and public transport plunged, contributing to a 20.8 per cent fall in first-half revenue, said ComfortDelGro in a stock exchange filing.
Group revenue came in at S$1.53 billion between January and June this year, compared with S$1.93 billion in the same period last year.
"The first six months of 2020 have been nothing short of catastrophic," said ComfortDelGro chairman Lim Jit Poh.
"If not for governmental reliefs, that loss would have been S$66.1 million," he said.
In comparison, the group reported a S$146.3 million net profit for the first half of 2019.
In addition to Singapore, ComfortDelGro also operates in countries such as Australia, the United Kingdom, China, Ireland, Vietnam and Malaysia - all of which have been hit by COVID-19.
Group operating profit in the first half fell 97 per cent to S$6.6 million, said ComfortDelGro.
The transport giant also said that it will not be disbursing an interim dividend, the first time it has had to make such a decision.
"Given the continued uncertainty in the global landscape ... We feel it is the only prudent thing to do as we need to conserve cash," said Mr Lim.
"These are exceptional times and we will need to make exceptional decisions," he added.
The group will review the final dividend at the end of the financial year.
ComfortDelGro's revenue was affected by lower rail ridership, the extension of rental relief and waiver schemes for taxi drivers, a smaller taxi fleet for the automotive engineering services business and the full or partial closure of operations for other business segments during the lockdown period.
The group also faced increased costs from additional cleaning and disinfecting measures as well as personal protective equipment to protect their frontline staff and passengers, said ComfortDelGro.
Revenue from the group's public transport business - which includes bus and rail services - fell 12.9 per cent to S$1.2 billion due to lower rail ridership during Singapore's circuit breaker period.
This was however partially offset by higher average fare after the fare increase introduced at the end of last year.
Revenue from the taxi business plunged 47.2 per cent to S$178.6 million, partly due to a smaller operating fleet and various COVID-19 relief schemes, including a full rental waiver for drivers during the circuit breaker period in Singapore.
ComfortDelGro has a fleet of 10,000 taxis in Singapore. Globally, it has a total fleet size of about 41,200 buses, taxis and rental vehicles.
Revenue from the automotive engineering services business fell 36 per cent to S$82.1 million, while the inspection and testing services dropped 22.1 per cent to S$39.9 million, and the driving centre business fell 34 per cent to S$15.5 million.
Revenue from its bus station business in China decreased by 41.9 per cent to $S6.8 million.
The only division that saw revenue increase was its car rental and leasing business, which rose 4.5 per cent to S$13.9 million due to larger fleet size.
“As we enter the second half year, there are still many uncertainties with regards to the trajectory of the virus and by extension, global recovery," said ComfortDelGro managing director and group chief executive Yang Ban Seng.
"In view of that, we continue to stand prepared for any eventualities,” he added.
The group also cautioned that it expects revenues to remain depressed amid the challenging outlook and is refining its internal cost structures and operational efficiencies.