ComfortDelgro – BT

ComfortDelGro Q1 net profit slips 9.4%

RISING fuel costs put the brakes on ComfortDelGro Corp’s net profit for the first quarter ended March 31, causing it to fall 9.4 per cent to $50.2 million.

The world’s second largest land transport group blamed the past few months’ sharply increasing fuel prices on a $17.5 million rise in its energy and fuel costs. It added that a loss was also incurred in the sale of diesel to the company’s taxi drivers as large discounts were still being extended to them.

But the land transport giant saw Q1 revenue rise 5.8 per cent to $753.5 million, thanks to strong contributions from both its local and overseas operations. The group said growth was broad-based, with most of its businesses chalking up increases in turnover.

ComfortDelGro’s overseas operations accounted for 44.3 per cent of turnover and 47.1 per cent of operating profit.

‘It has been a difficult quarter with oil prices continually reaching new highs,’ said ComfortDelGro MD and group CEO Kua Hong Pak in a statement. ‘But we remain focused on growing our businesses. Indeed, our various operations around the world remain sound, with most showing good growth at the top line.’

First-quarter turnover for the bus business rose 5.7 per cent to $378.6 million on higher contributions from the group’s operations in Australia and China. Overseas bus operations made up 59 per cent of total group bus turnover.

At listed unit SBS Transit, net profit for the first quarter ended March 31 fell 10.2 per cent to $15.3 million on increases in fuel costs, depreciation and premises costs. But revenue rose 8.4 per cent to $176.6 million mainly due to higher bus and rail revenue, and higher rental income.

Earnings per share for SBS’s Q1 was 4.96 cents, down from the previous corresponding quarter’s 5.58 cents. The unit did not declare any dividend for Q1. The final tax-exempt (one-tier) dividend of 3.25 cents per share which SBS earlier declared for the year ended Dec 31, 2007, will be paid on May 28.

ComfortDelGro’s Q1 turnover from the taxi business was up 6 per cent to $233.9 million. In China, taxi’s turnover rose 13.6 per cent to $26.8 million on contributions from its Nanjing operations, which were acquired last August, as well as increases in fleet size in Nanning and Chengdu.

In Singapore, taxi’s turnover was up 12.2 per cent to $147.6 million mainly because of an increase in cashless transactions. But the group’s diesel business posted an operating loss of $6.3 million – in contrast to an operating profit of $6.4 million a year ago – due to diesel discounts for its taxi drivers.

As for the rail business, Q1 turnover rose 14.2 per cent to $25.7 million as the average daily ridership for the North-east MRT Line jumped 14.7 per cent to 292,000, and that on the Punggol and Sengkang LRTs increased 12.9 per cent to 42,000.

ComfortDelGro’s Q1 earnings per share was 2.41 cents, down from last year’s 2.67 cents. Net asset value per ordinary share was 73.35 cents, up from Q1 2007’s 72.44 cents. No dividend has been declared by the group.

Looking ahead, Mr Kua said the global economic outlook remained ‘very uncertain and a more widespread decline in global economic activities cannot be ruled out’.

‘Inflationary cost pressures will be felt more keenly and oil prices are likely to remain volatile and high,’ he said.

ComfortDelGro’s share price ended unchanged at $1.76 yesterday, while SBS Transit closed one cent higher at $2.22.

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