ComfortDelGro profit up 1.6% to $58.2mln

Group said growth would have been stronger had $15.2mln negative foreign currency translation effect is lower.

ComfortDelGro Corporation on Friday announced its unaudited results for the second quarter ended 30 June 2010.

Group
ComfortDelGro Corporation’s second quarter revenue increased by $31.0 million or 4.1% to $789.3 million compared to the same period last year due to broad-based growth. The bus business continued to lead growth by accounting for over 60% of the increase in Group revenue, followed by the taxi business, the rail business, the vehicle inspection and testing business, the driving centre business, the bus station business and the car rental and leasing business, according to ComfortDelGro report.

Revenue from the Group’s overseas operations accounted for 43.1% of Group revenue.

Operating profit for the quarter increased by 5.1% to $99.3 million on the back of the growth in revenue. Operating profit from the overseas businesses accounted for 42.4% of Group operating profit due to stronger contributions from Australia and China.

Net profit for the quarter increased by 1.6% to $58.2 million.

For the half-year ended 30 June 2010, Group revenue increased by 5.5% to $1.56 billion. Operating profit correspondingly grew by 7.9% to $189.9 million and net profit increased by 2.5% to $112.5 million.

ComfortDelGro Managing Director and Group Chief Executive Officer, Mr Kua Hong Pak, said: “We continued growing in the first six months of the year. Had it not been for the negative foreign currency translation effect of $15.2 million, growth would have been even stronger. The outlook for the global economy however remains uncertain and challenges remain.”

Operations review

• Bus:
At Group level, second quarter revenue from the bus business increased by 5.0% to $399.8 million as growth from operations in Singapore, Australia and China was offset by a decline in the United Kingdom. Revenue from overseas bus operations continued to account for the bulk of Group bus revenue – amounting to 62.0%. Much of the growth came from the Group’s Australian bus business which saw revenue jump by 34.2% to $91.4 million thanks to an increase in services and a favourable foreign currency translation effect.

Revenue from the China bus business was 9.2% higher at $16.6 million due to higher ridership.

In Singapore, revenue from scheduled bus services under SBS Transit increased by 3.6% to $137.3 million for the quarter due to a 4.1% growth in average daily ridership. Including revenue from advertising and rental, total revenue at SBS Transit would have been 4.7% higher at $146.4 million.

Revenue from the bus business in the UK was 8.1% lower at $139.6 million due to the negative translation effect of the weaker Sterling Pound.

The overseas bus business accounted for 62.0% of total Group bus revenue and 73.4% of Group operating profit.

• Taxi:
At Group level, second quarter revenue from the taxi business increased by 3.5% to $238.7 million.

In Singapore, revenue from the taxi business increased by 9.2% to $170.4 million due increases in operating fleet and cashless transactions.

In the UK, revenue from the taxi business fell by 12.0% to $35.2 million due to a decline in corporate bookings and the translation effect of the weaker Sterling Pound. In China, revenue from the taxi business dipped by 1.9% to $31.6 million due to the negative foreign currency translation effect.

In Vietnam, revenue from the taxi business was 37.5% lower at $1.5 million due to a reduction in fleet.

The overseas taxi business accounted for 28.6% of total Group taxi revenue and 32.5% of total Group taxi operating profit.

• Rail:
Revenue from the rail business in the second quarter increased by 14.3% to $30.0 million.

Average daily ridership for the North East Line and the Punggol and Sengkang LRTs for the quarter grew by 14.4% and 9.6% to 361,633 and 49,620 respectively.

• Bus Station:
Revenue from the bus station business in Guangzhou increased by 5.8% to $5.5 million during the quarter from an increase in passenger volume.

• Vehicle inspection and testing services:
Revenue for the vehicle inspection and testing business grew by 9.6% to $21.7 million due to increases in the number of vehicles inspected and an increase in the number of projects completed by Setsco Services Pte Ltd.

Dividend
A tax-exempt one-tier interim dividend of 2.7 cents per ordinary share has been declared. This represents a payout ratio of 50% of the distributable profit of the first half of 2010.

Commentary
Revenue from the bus business in Singapore is expected to benefit from ridership growth. Advertising revenue is expected to benefit from the strong economic growth in Singapore. In the UK, revenue from the bus business is expected to be impacted by the translation effect of the weaker Sterling Pound. Revenue from the bus business in Australia is expected to improve with more services contracted while revenue from the bus business in China is expected to be maintained.

Revenue from the rail business is expected to benefit from an expected increase in ridership.

Revenue from the bus station business in Guangzhou is expected to increase moderately.

Revenue from the taxi business in Singapore is expected to increase with more cashless transactions and new replacement taxis. Revenue from the taxi business in China, UK and Vietnam is expected to be maintained.

Revenue from the driving centre business in Singapore and China is expected to improve with higher student enrolments.

Revenue from the vehicle inspection and testing business in Singapore is expected to improve.

Revenue from the car rental and leasing business in Singapore, Malaysia and China is expected to be maintained.

Revenue from the automotive engineering business is expected to be maintained.

As global economic conditions remain uncertain, the Group will continue to focus on the demand patterns of its customers, control expenses even though fuel and electricity costs will continue to pose challenges and remain vigilant while seeking opportunities for growth.