Category: ComfortDelgro
ComfortDelgro – DBSV
No surprise that SBS Transit won the DTL MRT tender
Award of the Downtown line
Award of DTL to SBS Transit. It was announced that ComfortDelGro’s subsidiary, SBSTransit, has been awarded the licence to operate the Downtown MRT line. The line is the 5th MRT line and will be 40km long.
Details of DTL. The DTL will be the 5th line of Singapore’s MRT network. This line will have a total of 34 stations, and will connect the north-western and eastern parts of Singapore to the central business district. The contract is on a 19 year lease, and it will also entail 14,000 sq m GFA of retail space. This line will be fully underground, driverless (as per North-East line, currently operated by SBST, and Circle Line operated by SMRT), and will be opened in 3 stages – 2013, 2015, and 2017.
According to the terms of licence, SBST will pay the LTA (Land Transport Authority) a licence fee amounting to S$1.6bn over the 19-year term of the operating lease. The licensing fee will entail a fixed and variable component. LTA will retain ownership of operating assets and infrastructure, while SBST will take care of operations, maintenance and insurance. Average daily ridership is expected to be in excess of 700,000 when it is fully operational.
No surprise to us, no change in forecasts for now. In our view, the award does not come as a surprise to us as we have earlier deduced that SBS Transit stood in good steed to clinch this contract. Given that DTL stage 1 is only expected to be operational in 2013, we do not envisage any major impact on our forecasts for now. However, we do note that there could be a gestation period, leading to initial start up losses, from the time DTL1 is operational till the other 2 later stages are operational, expected in 2015 and 2017.
CD still the preferred land transport counter. We continue to prefer CD over SMRT for it’s cheaper valuation and diversified geographical exposure of its business. With the award of this contract, this helps to increase its market share of the rail network, which we see as the key mode of public transport which will enjoy stronger growth vis-avis buses. The award will boost long term growth but could dampen earnings growth when the line is operational in 2013.
Bloomberg: CD SP | Reuters: CMDG.SI
ComfortDelgro – DBSV
No surprise that SBS Transit won the DTL MRT tender
Award of the Downtown line
Award of DTL to SBS Transit. It was announced that ComfortDelGro’s subsidiary, SBSTransit, has been awarded the licence to operate the Downtown MRT line. The line is the 5th MRT line and will be 40km long.
Details of DTL. The DTL will be the 5th line of Singapore’s MRT network. This line will have a total of 34 stations, and will connect the north-western and eastern parts of Singapore to the central business district. The contract is on a 19 year lease, and it will also entail 14,000 sq m GFA of retail space. This line will be fully underground, driverless (as per North-East line, currently operated by SBST, and Circle Line operated by SMRT), and will be opened in 3 stages – 2013, 2015, and 2017.
According to the terms of licence, SBST will pay the LTA (Land Transport Authority) a licence fee amounting to S$1.6bn over the 19-year term of the operating lease. The licensing fee will entail a fixed and variable component. LTA will retain ownership of operating assets and infrastructure, while SBST will take care of operations, maintenance and insurance. Average daily ridership is expected to be in excess of 700,000 when it is fully operational.
No surprise to us, no change in forecasts for now. In our view, the award does not come as a surprise to us as we have earlier deduced that SBS Transit stood in good steed to clinch this contract. Given that DTL stage 1 is only expected to be operational in 2013, we do not envisage any major impact on our forecasts for now. However, we do note that there could be a gestation period, leading to initial start up losses, from the time DTL1 is operational till the other 2 later stages are operational, expected in 2015 and 2017.
CD still the preferred land transport counter. We continue to prefer CD over SMRT for it’s cheaper valuation and diversified geographical exposure of its business. With the award of this contract, this helps to increase its market share of the rail network, which we see as the key mode of public transport which will enjoy stronger growth vis-avis buses. The award will boost long term growth but could dampen earnings growth when the line is operational in 2013.
Bloomberg: CD SP | Reuters: CMDG.SI
ComfortDelgro – BT
ComfortDelGro’s Q2 net profit up 3% at $60m
The group declares an interim dividend of 2.7cents per share
COMFORTDELGRO Corporation posted a 3 per cent rise year on year in net profit to about $60 million for the second quarter ended June 30, while revenue increased 6.8 per cent to $843 million.
During the quarter, operating profit improved by 3.7 per cent to $103 million despite rising costs, especially for fuel and electricity. Earnings per share were 2.87 cents, up from 2.79 cents in Q2 2010.
The group has declared an interim dividend of 2.7 cents per share, payable Sept 1.
For the half-year ended June 30, net profit slipped 2.2 per cent to $110 million, dragged down by higher operating costs while group revenue climbed 5.8 per cent to $1.65 billion.
In Q2 2011, ComfortDelGro’s bus business saw revenue increase about 5 per cent to $419.5 million, as growth in Australia, Singapore and the UK helped to mitigate a decline in China.
The group’s taxi business saw revenue increase by 7.1 per cent to $255.6 million, with stronger contributions coming in from Singapore and Vietnam.
Revenue from the rail business rose 11.1 per cent to $33.3 million as average daily ridership for the North East Line and the Punggol and Sengkang LRTs grew by 15.7 per cent and 15.8 per cent to 418,000 and 57,000 respectively. Including rental and advertising income, total revenue from the rail business increased 10.2 per cent to $36.8 million.
Meanwhile, revenue contributions from its bus station business in Guangzhou, its vehicle inspection and testing services as well as its automotive engineering services were all higher in the second quarter.
The group’s overseas operations accounted for about 42 per cent of group revenue in Q2 2011, though the group aims to derive 70 per cent of its total revenue from overseas within the next four to six years.
‘The global economic uncertainty and the inflationary pressures in the countries we operate will continue to pose challenges for the group,’ said managing director and group CEO Kua Hong Pak. ‘However, with our strong balance sheet and low gearing, we will be well positioned to meet these challenges.’
Shares in ComfortDelGro closed at $1.26 yesterday, down one cent.
Land Transport – BT
PTC gives nod for net 1% hike in bus, train fares
THE Public Transport Council (PTC) has allowed an overall net fare adjustment of one per cent, and operators SBS Transit and SMRT can expect a combined increase in annual revenue of $15 million.
From Oct 8, 2011, adult card fares for buses and trains will go up by two cents a journey, while senior citizen concessionary card fares will increase by one cent a journey although senior citizens will now get concessionary travel all day throughout the week.
Child/student concessionary card fares remain unchanged. But cash fares for adult bus and train rides will be 10 cents higher per trip across-the-board. There will be no change to senior citizen and child/student cash fares.
The PTC said that overall, the average fare increase translates to about 15 cents a week or about $8 a year for the 85 per cent of commuters who would experience a fare increase.
In July, the two public transport operators applied for the maximum fare adjustment of 2.8 per cent allowed under the fare formula for 2011, citing rising fuel and manpower costs.
‘The approved fare adjustment of one per cent is significantly less than the quantum of adjustment that the operators have applied for,’ said PTC chairman Gerard Ee.
He said that the decision comes after careful deliberation, and the council balanced the need to keep fares affordable with the long-term viability of the public transport operators so that they can continue to make capital investments and provide the expected quality of service.
Mr Ee cited the example of SMRT, which has already bought 238 new buses for $100 million to renew and expand its fleet from next month until December 2012, and SBST, which has purchased 600 buses for $268 million for delivery this year and the next.
‘We have tried to keep the fare adjustment small for commuters but we know that any fare adjustment, no matter how small, would still be felt by commuters, especially those from needy families,’ he said, adding that those who need additional assistance will get help from the government’s Public Transport Fund. To help needy families cope with the fare adjustment, the government together with SMRT and SBS Transit have set aside $4 million to fund 200,000 public transport vouchers.
Mr Ee also said that the PTC focused on senior citizens because of the greying population and to support moves to encourage them to work beyond retirement age.
The PTC said that the fare adjustment took into consideration Singapore’s economic outlook and the affordability of public transport.
‘The economic outlook remains positive with the latest forecast for GDP to grow by 5-7 per cent in 2011, and the latest unemployment rate as at June 2011 remains low at 2.1 per cent,’ the council said. ‘The public transport affordability indicator has also been on a downtrend for the past seven years, falling from 5.3 per cent in 2003 to 3.7 per cent in 2010. This indicates that bus and train fares have remained affordable for the majority of commuters.’
Under the fare formula, the maximum fare adjustment allowable is calculated by subtracting 1.5 per cent from the Price Index, where 1.5 per cent is the productivity extraction set for the five years from 2008-2012. As for the Price Index, it is derived from adding half of the change in the Consumer Price Index over the preceding year, to half of the change in the average monthly earnings for all workers over the preceding year.
The PTC delayed 2011’s fare adjustment to coincide with the opening of the final two phases of the Circle Line on Oct 8. The exercise usually takes place in the middle of the year.
This year’s hike comes on the back of two straight years of cuts. Last year, the PTC granted an overall 2.5 per cent reduction in bus and train fares and that took effect on July 3, 2010 with the introduction of Distance Fares. Under Distance Fares, the transfer penalty was removed completely, so commuters travelling the same distance pay the same fare for the same type of service, whether they travel direct or make transfers. Then, the PTC said that the 63 per cent of commuters who enjoyed fare savings spent an average of 48 cents a week less, or $25 a year. As for the 34 per cent of commuters who saw an increase in their public transport expenditure, the average increase was 31 cents a week or $16 a year.
In 2009, SBST and SMRT announced that they would not apply for fare adjustments that year due to the global financial crisis. Both worked with the PTC to pass back savings from the 2009 Singapore Budget, so that from April 1, 2009, commuters benefited from an overall 4.6 per cent cut in bus and train fares.
Under the fare adjustment formula in 2009, the public transport operators could have applied for an increase of up to 5 per cent. But before 2009, fares were increased in the preceding three years – 0.7 per cent in 2008, 1.1 per cent in 2007, and 1.7 per cent in 2006.
Land Transport – BT
PTC gives nod for net 1% hike in bus, train fares
THE Public Transport Council (PTC) has allowed an overall net fare adjustment of one per cent, and operators SBS Transit and SMRT can expect a combined increase in annual revenue of $15 million.
From Oct 8, 2011, adult card fares for buses and trains will go up by two cents a journey, while senior citizen concessionary card fares will increase by one cent a journey although senior citizens will now get concessionary travel all day throughout the week.
Child/student concessionary card fares remain unchanged. But cash fares for adult bus and train rides will be 10 cents higher per trip across-the-board. There will be no change to senior citizen and child/student cash fares.
The PTC said that overall, the average fare increase translates to about 15 cents a week or about $8 a year for the 85 per cent of commuters who would experience a fare increase.
In July, the two public transport operators applied for the maximum fare adjustment of 2.8 per cent allowed under the fare formula for 2011, citing rising fuel and manpower costs.
‘The approved fare adjustment of one per cent is significantly less than the quantum of adjustment that the operators have applied for,’ said PTC chairman Gerard Ee.
He said that the decision comes after careful deliberation, and the council balanced the need to keep fares affordable with the long-term viability of the public transport operators so that they can continue to make capital investments and provide the expected quality of service.
Mr Ee cited the example of SMRT, which has already bought 238 new buses for $100 million to renew and expand its fleet from next month until December 2012, and SBST, which has purchased 600 buses for $268 million for delivery this year and the next.
‘We have tried to keep the fare adjustment small for commuters but we know that any fare adjustment, no matter how small, would still be felt by commuters, especially those from needy families,’ he said, adding that those who need additional assistance will get help from the government’s Public Transport Fund. To help needy families cope with the fare adjustment, the government together with SMRT and SBS Transit have set aside $4 million to fund 200,000 public transport vouchers.
Mr Ee also said that the PTC focused on senior citizens because of the greying population and to support moves to encourage them to work beyond retirement age.
The PTC said that the fare adjustment took into consideration Singapore’s economic outlook and the affordability of public transport.
‘The economic outlook remains positive with the latest forecast for GDP to grow by 5-7 per cent in 2011, and the latest unemployment rate as at June 2011 remains low at 2.1 per cent,’ the council said. ‘The public transport affordability indicator has also been on a downtrend for the past seven years, falling from 5.3 per cent in 2003 to 3.7 per cent in 2010. This indicates that bus and train fares have remained affordable for the majority of commuters.’
Under the fare formula, the maximum fare adjustment allowable is calculated by subtracting 1.5 per cent from the Price Index, where 1.5 per cent is the productivity extraction set for the five years from 2008-2012. As for the Price Index, it is derived from adding half of the change in the Consumer Price Index over the preceding year, to half of the change in the average monthly earnings for all workers over the preceding year.
The PTC delayed 2011’s fare adjustment to coincide with the opening of the final two phases of the Circle Line on Oct 8. The exercise usually takes place in the middle of the year.
This year’s hike comes on the back of two straight years of cuts. Last year, the PTC granted an overall 2.5 per cent reduction in bus and train fares and that took effect on July 3, 2010 with the introduction of Distance Fares. Under Distance Fares, the transfer penalty was removed completely, so commuters travelling the same distance pay the same fare for the same type of service, whether they travel direct or make transfers. Then, the PTC said that the 63 per cent of commuters who enjoyed fare savings spent an average of 48 cents a week less, or $25 a year. As for the 34 per cent of commuters who saw an increase in their public transport expenditure, the average increase was 31 cents a week or $16 a year.
In 2009, SBST and SMRT announced that they would not apply for fare adjustments that year due to the global financial crisis. Both worked with the PTC to pass back savings from the 2009 Singapore Budget, so that from April 1, 2009, commuters benefited from an overall 4.6 per cent cut in bus and train fares.
Under the fare adjustment formula in 2009, the public transport operators could have applied for an increase of up to 5 per cent. But before 2009, fares were increased in the preceding three years – 0.7 per cent in 2008, 1.1 per cent in 2007, and 1.7 per cent in 2006.