ComfortDelGro's Q2 net profit falls by 5.5%

SINGAPORE: ComfortDelGro's net profit fell by 5.5 per cent to S$75 million in the second quarter, a shallower dip compared to the previous quarter with the company announcing an increase in group revenue on the back of maiden contributions from new acquisitions.

Revenue for the quarter ended June 2018 increased by 5.4 per cent to S$941.1 million, with ComfortDelGro attributing this to its "aggressive expansionary policy" in a statement on Friday (Aug 10).

Since the beginning of the year the company has invested S$269 million in various acquisitions, with contributions from new subsidiaries like National Patient Transport and Tullamarine Bus Lines in Australia as well as AZ Bus in Singapore helping to boost topline figures, said ComfortDelGro.

The actual revenue increase of S$46.2 million was further aided by a positive foreign currency translation effect of S$1.8 million, it added.

For the half-year ended Jun 30, 2018, group revenue increased by 3.2 per cent to S$1.82 billion while net profit attributable to shareholders fell by 12.7 per cent to S$141.3 million.

Improvement in the underlying businesses came from the public transport services business and the driving centre business offset by decreases in the taxi business, the automotive engineering services business, the car rental and leasing business, the bus station business and the inspection and testing services business, according to ComfortDelGro.

Revenue from ComfortDelGro's public transport services business increased by 13.9 per cent to $667.9 million on the back of growth in Singapore, Australia and the United Kingdom.

Growth came from higher fees earned, higher mileages operated as well as contributions from newly acquired businesses, said ComfortDelGro.

However it said that the rail business would continue to be challenging due to a fare reduction which came into effect on Dec 29 last year and rising operating and maintenance costs.

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In Singapore, rail ridership continued to grow but operations continued to incur losses as the fare revenue was not sufficient to cover rising operating and maintenance costs, said ComfortDelGro.

Meanwhile, revenue for the taxi business decreased by 12 per cent year-on-year to S$184.7 million due to a smaller operating fleet.

However, revenue is expected to be maintained for the taxi business, the company said, citing stabilisation in Singapore and recent acquisitions in China, Australia and the United Kingdom.

“We performed better in the second quarter compared to the previous one and also narrowed the variance year-on-year," said ComfortDelGro Managing Director/Group CEO Yang Ban Seng. "This was largely due to the continued growth of the public transport services business and the stabilisation of the taxi business in Singapore."

"With a more rational competition landscape, the recruitment of taxi drivers has improved leading to a higher utilisation of the fleet," he said, adding that the company was also expanding its taxi fleet to meet growing demand.

Mr Yang added that the company hopes to conclude more deals in the coming months, after new businesses acquired earlier this year and towards the end of last year started making maiden contributions to revenue and profits.