ComfortDelGro's rail segment suffers $5.8m operating loss

No thanks to fat Downtown Line costs.

According to OCBC, CDG managed to register positive growth in operating profits for all its core segments, with the exception of its Rail Business, which turned in an operating loss of S$5.8m (excluding advertising and rental revenue). 

This was attributed largely to start-up costs from the Downtown Line (DTL) amounting to S$20.7m.

Here's more from OCBC:

CDG’s overseas operations contributed 40.5% of its total revenue, but 48.9% of overall operating profits.

We believe this highlights the struggles faced by its Singapore operations. We expect continued start-up losses from its DTL operations in FY14 which would cause a drag on its overall Rail Business.

However, this would be mitigated by narrowing losses for its bus operations due to the upward fare adjustment (effective 6 Apr this year) and continued traction in its taxi operations, coupled with continued growth for its overseas operations.

In particular, we are positive on the full year contribution in FY14 from its Metroline West acquisition in the UK.