ComfortDelgro Corporation Limited’s Latest Earnings: Slower Revenue Growth with Steady Earnings

ComfortDelgro Corporation Limited (SGX: C52) reported its fiscal first-quarter earnings yesterday evening. The reporting period was for 1 January 2015 to 31 March 2015.

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 more than 46,300 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 ComfortDelGro’s business in here and here. You can also look up the company’s previous quarter’s earnings here.

Financial highlights

The following’s a rundown on the land transport outfit’s latest financial figures:

  1. Quarterly revenue for ComfortDelgro rose by 1.3% to $963.5 million on a year on year comparison. Sales growth was relatively broad-based with the major contributor being the bus and taxi operations.
  2. Quarterly net profit attributable to shareholders increased by 6.8% year on year to $67.6 million.
  3. Consequently, earnings per share (EPS) increased from 2.97 cents in the first quarter of 2014 to 3.14 cents in the reporting quarter – an increase of 5.7%.
  4. For the first quarter of 2015, cashflow from operations was $183.6 million with capital expenditures clocking in at $128.4 million. This gives ComfortDelgro $55.2 million in free cash flow, down from $97.3 million a year ago (operating cash flow and capital expenditures were at $222.1 million and $124.8 million, respectively, for the quarter ended 31 March 2014).
  5. As of 31 March 2015, the land transport outfit had $918.4 million in cash and equivalents and $765.9 million in debt, giving rise to a net cash position of $152.5 million. With ComfortDelgro’s net cash position of $108.1 million a year ago, the firm’s balance sheet has strengthened.

In short, we had slow revenue growth but a steady increase in profit from ComfortDelgro. The land transport outfit ended the quarter with a healthy balance sheet and also managed to generate positive free cash flow.

Operational highlights and a future outlook

For the bus operations, total revenue for the reporting quarter was $477 million – an increase of 2.3% year on year.  The biggest contributor to revenue growth was SBS Transit, which boasted an 11.7% year over year increase in its top-line to $196.4 million on the back of an increase in average daily ridership. But while ComfortDelGro’s Singapore bus operations (represented by SBS Transit) takes up more than 40% of the bus segment’s overall revenue, more than 89% of its operating profit comes from overseas.

Moving on to the taxi segment, Singapore and China led the charge with year on year sales growth of 5.5% and 7.2%, respectively. Total revenue for the first quarter of 2015 for the taxi segment was $321.8 million, up 5.2% from a year ago.

The last major contributor to sales growth at ComfortDelgro was the rail business segment. This segment saw a nice 8.1% increase in sales to $51 million mainly as a result of higher average daily ridership across the board.

Looking ahead, ComfortDelgro’s management team expects to see growth from its bus, taxi, and rail operations in Singapore as well as its bus operations in the United Kingdom. On a more cautionary note, management stated that the company continues to face keen competition and cost pressures.

Foolish summary

At its closing price yesterday of $3.05, ComfortDelgro traded at around 22.6 times its trailing earnings and has a dividend yield of around 2.8% (thanks to its annual dividend of 8.25 cents per share in 2014).

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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.