ComfortDelgro – BT

ComfortDelGro’s Q1 profit up 3.4%

Bus business led growth, accounting for over 60% of rise in group revenue

GROWTH in ComfortDelGro’s key businesses boosted revenue by 7.0 per cent to $766.9 million for the first quarter ended March 31, 2010, and this helped net profit to inch up 3.4 per cent to $54.3 million. The results translated to earnings per share of 2.6 cents, up from 2.52 cents a year earlier. The world’s second largest land transport group said the bus business led growth by accounting for over 60 per cent of the increase in group revenue. And Q1 revenue from overseas operations now accounts for 42.9 per cent of total group revenue, up from 40.3 per cent previously.

In line with the revenue growth, operating profit grew by 11.2 per cent to $90.6 million. But taxation expense jumped 43.7 per cent to $17.1 million for the quarter due to higher taxable profits and a writeback of deferred taxation of $5.2 million in Q1 2009.

ComfortDelGro managing director and group CEO Kua Hong Pak said: ‘We have continued to grow both our top line and bottom line but we are mindful that the global economic recovery remains fragile and there are significant challenges ahead.’

First quarter revenue from the bus business climbed 8.8 per cent to $379.3 million on growth in the Australian business and the positive translation effect of the stronger Australian dollar. But revenue from the China business slipped 2.8 per cent to $14.1 million due to lower ridership from the prolonged winter in Shenyang.

In the UK, bus revenue was down 0.7 per cent at $129.9 million due to tighter quality incentive targets.

In Singapore, listed unit SBS Transit’s Q1 revenue fell 2.8 per cent to $174.6 million on lower bus fare revenue. As a result, net profit slumped 12.7 per cent to $16.4 million. SBST said the fall in bus fare revenue was partially offset by higher rail fare revenue and advertisement revenue.

Q1 operating expenses also dropped 2.1 per cent to $155.6 million, mainly due to lower fuel and electricity costs, lower repairs and maintenance and lower other operating expenses but partially offset by higher depreciation expenses.

ComfortDelGro said revenue from the overseas bus businesses continues to outstrip that of the Singapore operations, accounting for 60.9 per cent of total group bus revenue, against 55.3 per cent in the same period last year.

Apart from the bus business, ComfortDelGro’s taxi, automotive engineering services, rail, vehicle inspection and testing, and driving centre businesses also experienced growth in Q1. At group level, growth in the Singapore and UK taxi operations allowed Q1 revenue to expand 5.0 per cent to $236.6 million. Revenue from the rail business rose 4.6 per cent to $28.7 million on higher average daily ridership for the North East Line, and the Punggol and Sengkang LRT lines. Together with rental and advertising income, total Q1 revenue from the rail business grew by 6.7 per cent to $31.9 million. Q1 revenue for the vehicle inspection and testing business was up 6.7 per cent to $20.7 million on a greater number of vehicles inspected, as well as the higher number of projects completed by the non-vehicle testing unit.

ComfortDelGro shares closed yesterday at $1.49.

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