ComfortDelgro Corporation Limited’s Latest Earnings: More of the Same Steady Growth

ComfortDelgro Corporation Limited (SGX: C52) reported its fiscal fourth quarter earnings yesterday evening for the financial year ended 31 December 2014. The reporting period was for 1 October 2014 to 31 December 2014.

ComfortDelgro is a global land transport giant with operations mainly in Singapore, Australia, the United Kingdom, and China. The company has a total fleet size of about 46,500 buses, taxis, and rental vehicles. It is also the majority owner of test and inspection outfit, Vicom Limited (SGX: V01), and bus and rail operator, SBS Transit Ltd  (SGX: S61).

You can learn more about the company here and here. You can also look up on the company’s second quarter earnings here.

Financial highlights

Here’s a rundown on the financial figures from ComfortDelGro’s latest earnings release:

  1. The fourth quarter’s revenue for ComfortDelgro rose by 5.7% to $1.05 billion on a year-on-year comparison. Sales growth was relatively broad-based with the major contributor being the bus and taxi operations. For the entire 2014, sales grew by 8.1% over 2013 to reach $4.05 billion.
  2. Net profit for the quarter increased by 6.3% year-on-year to $63.7 million. For the full year, net profit grew 7.7% above 2013’s net profit levels; net profit for 2014 was $283.5 million
  3. On a full year basis, earnings per share (EPS) increased from 12.38 cents in 2013 to 13.23 cents in 2014. This represents an increase of 6.9%.
  4. For 2014, cashflow from operations was up 5.3% to $734.9 million with capital expenditures clocking in at $470.9 million. This gives ComfortDelgro $264 million in free cash flow in 2014; it is a slight decrease from the figure of $282 million seen in 2013.
  5. As of 31 December 2014, the company had $825.8 million in cash and equivalents and $737.1 million in debt.
  6. The management team declared a final dividend of 4.5 cents per share, up 12.5% from last year’s 4 cents per share. For the whole of 2014, ComfortDelGro’s total dividend amounted to 8.25 cents per share, up from 7 cents in 2013.

In short, we had more of the same from the land transport giant. ComfortDelGro’s revenue and profit continued its steady climb – not unlike the previous quarter. The global land transport outfit ended 2014 with a net cash position of $88.7 million on its balance sheet and managed to generate positive free cash flow for the year.

Operational highlights

For the company’s bus operations, total revenue for the year was $2.06 billion. In particular, ComfortDelgro enjoyed an impressive 29.3% growth in sales in the United Kingdom. This growth was assisted by a positive currency translation. It’s notable that the group’s overseas bus operations accounted for 91% of the group’s total bus operating profit and has been a key driver of growth this year.

Moving on to the taxi segment, Singapore and the United Kingdom led the charge with a 7.7% and 9.2% increase in revenue, respectively. Total revenue in 2014 for ComfortDelGro’s taxi operations was $1.28 billion.

The last major contributor to sales growth at ComfortDelgro was the rail business segment. This segment saw a nice 19.5% increase in sales due to higher average daily ridership and higher average fares from the Downtown Line in Singapore. The rail business ended the year with $196.8 million in sales.

Looking forward, ComfortDelGro’s management team expects to see continued growth from the same areas this quarter. This means that much of its growth is expected to come from its bus, taxi, and rail operations in Singapore as well as its bus operations in the United Kingdom and Australia.

On a more cautionary note, management stated that “cost pressures will continue to be felt throughout the Group.”

Foolish summary

At its closing price yesterday of $3.14, ComfortDelgro traded at around 23.7 times its latest trailing earnings with a trailing twelve months dividend yield of around 2.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.