ComfortDelgro Corporation Ltd’s Latest Earnings: More of the Same

ComfortDelgro Corporation Ltd (SGX: C52) reported its fiscal second-quarter earnings yesterday evening. The reporting period was for 1 April 2015 to 30 June 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 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 ComfortDelGro in here and here. You can also look up its previous quarter’s earnings here.

Financial highlights

The following’s a quick take on ComfortDelGro’s latest financial figures:

  1. Quarterly revenue rose by 2.1% to $1.04 billion on a year-on-year comparison. Sales growth was relatively broad-based with the major contributor being the bus and taxi operations.
  2. Net profit attributable to shareholders increased by 6.9% year-on-year to $80.9 million.
  3. Earnings per share (EPS) also increased from 3.53 cents in the second-quarter of 2014 to 3.75 cents per share in the reporting quarter.
  4. For the second-quarter of 2015, cash flow from operations was $155 million with capital expenditures clocking in at $227.3 million. Unfortunately, this gives ComfortDelgro negative free cash flow of $72.3 million. This is a big step backward from a year ago when the firm had $148.8 million in cash flow from operations, $130.8 million in capital expenditures, and thus $18 million in positive free cash flow.
  5. As of 30 June 2015, the transport provider had $747.5 million in cash and equivalents and $760.6 million in debt. This was down from the net cash position of $88.7 million that it had at the end of 2014.

In short, we had slow revenue growth, but faster profit growth from ComfortDelgro. This is similar compared to the previous quarter. But, ComfortDelGro had slipped into negative free cash flow territory in the reporting quarter and its balance sheet had weakened compared to the end of last year. Investors may want to keep an eye on these developments.

ComfortDelGro’s board of directors had declared an interim dividend of $0.04 per share in the quarter which was a 6.7% increase from last year’s interim dividend.

Operational highlights

Revenue for the bus operations segment was $538 million for the reporting quarter, an increase of 4.1% year-on-year. While SBS Transit had demonstrated good topline growth, the segment’s UK and Australian revenue were hampered by currency exchange headwinds.

It was a similar story for the taxi segment where Singapore, China, and Vietnam had year-on-year sales growth of 4.8%, 7.6%, and 17.6% respectively. In contrast, the taxi operations in UK and Australia were a drag on the segment’s results. In all, revenue for the second quarter for ComfortDelGro’s taxi segment was $330.8 million.

There was little change in the management team’s outlook. ComfortDelGro expects to see growth from its bus, taxi, and rail operations. But, the company continues to face keen competition and cost pressures.

Foolish summary

At its closing price yesterday of $3.01, ComfortDelgro traded at around 22.1 times its trailing earnings and has a trailing dividend yield of around 2.8%.

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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 owns shares in Vicom Ltd.