A resilient stock for uncertain times

Company Overview

ComfortDelGro Corporation (CDG) is a land transport conglomerate with businesses across various business segments and geography. The bus and taxi businesses are the largest profit contributors for the Group.

• Net income increased 6.8%y-y

• Rail profitability declined in preparation for DTL

• Australia’s bus business the best performer

• Maintain Buy with unchanged TP of S$1.65

What is the news?

CDG reported a strong 6.8% growth in net profit for the quarter due to strong underlying business growth with relatively unchanged margins. Profit contributions increased across all business segments, except for the Rail & Driving centre business. Despite revenue growth of 13% for the Rail business, profitability declined as the company ramped up its headcount in preparation for DTL.

How do we view this?

The results were in line with our expectations. Most business units performed well with healthy margins and revenue growth. However, contributions from CDG’s China bus business disappointed and reported a second consecutive quarter of loss due to lower mileage operated. Among the more significant profit contributors, Australia’s bus business performed the best with an estimated 18.5% increase in profits in local currency terms.

Investment Actions?

CDG remains our preferred stock in the Land Transport sector. The Group’s overseas diversification shields them from the near term headwinds facing Singapore’s Land Transport sector. Maintain Buy.

ComfortDelgro’s Q1 profit at S$53.5 million

Transport operator ComfortDelgro on Monday reported a 6.8 per cent rise in first-quarter net profit from the year-earlier period to S$53.5 million as revenue grew 6.5 per cent to S$855.4 million.

The taxi business led growth, accounting for about 43 per cent of the increase in group turnover, followed by the bus business with 34 per cent, the automotive engineering services business with 17 per cent, the rail and vehicle inspection and testing businesses with about 4 per cent each, and the bus station business with about 2 per cent.

These more than offset declines in revenue by the driving centre and car rental and leasing businesses, it said.

Revenue from the ComfortDelgro’s overseas operations accounted for 40.7 per cent of total turnover, it added.

ComfortDelGro is one of the world’s largest land transport companies with a total fleet size of over 46,400 buses, taxis and rental vehicles. Based in Singapore, it also has operations in China, the United Kingdom, Ireland, Australia, Vietnam and Malaysia.

ComfortDelgro’s Q1 profit at S$53.5 million

Transport operator ComfortDelgro on Monday reported a 6.8 per cent rise in first-quarter net profit from the year-earlier period to S$53.5 million as revenue grew 6.5 per cent to S$855.4 million.

The taxi business led growth, accounting for about 43 per cent of the increase in group turnover, followed by the bus business with 34 per cent, the automotive engineering services business with 17 per cent, the rail and vehicle inspection and testing businesses with about 4 per cent each, and the bus station business with about 2 per cent.

These more than offset declines in revenue by the driving centre and car rental and leasing businesses, it said.

Revenue from the ComfortDelgro’s overseas operations accounted for 40.7 per cent of total turnover, it added.

ComfortDelGro is one of the world’s largest land transport companies with a total fleet size of over 46,400 buses, taxis and rental vehicles. Based in Singapore, it also has operations in China, the United Kingdom, Ireland, Australia, Vietnam and Malaysia.

ComfortDelGro Q1 earnings climb 6.8% to $53.5m

Revenue up 6.5%, helped by growth in key segments

TRANSPORT group ComfortDelGro posted a 6.8 per cent rise in net profit to $53.5 million for the first quarter ended March 31, as growth across its key business segments boosted revenue by 6.5 per cent.

Revenue for the first quarter was $855.4 million, compared with $803 million in Q1FY11 while earnings per share were 2.56 cents, up from 2.40 cents in the corresponding quarter last year.

Revenue from overseas operations accounted for 40.7 per cent of group revenue.

The group's revenue from bus business registered growth of 4.6 per cent to $410.5 million while operating profit was 13.6 per cent higher at $32.5 million.

ComfortDelGro Q1 earnings climb 6.8% to $53.5m

Revenue up 6.5%, helped by growth in key segments

TRANSPORT group ComfortDelGro posted a 6.8 per cent rise in net profit to $53.5 million for the first quarter ended March 31, as growth across its key business segments boosted revenue by 6.5 per cent.

Revenue for the first quarter was $855.4 million, compared with $803 million in Q1FY11 while earnings per share were 2.56 cents, up from 2.40 cents in the corresponding quarter last year.

Revenue from overseas operations accounted for 40.7 per cent of group revenue.

The group's revenue from bus business registered growth of 4.6 per cent to $410.5 million while operating profit was 13.6 per cent higher at $32.5 million.