ComfortDelGro Corporation Limited’s Latest Earnings: Revenue Grinds to a Halt

ComfortDelGro Corporation Limited (SGX: C52) reported its third-quarter earnings last Friday evening. The reporting period was for 1 July 2015 to 30 September 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 over 46,500 buses, taxis, and rental vehicles. It is also the majority owner of test and inspection outfit Vicom Limited (SGX: V01) and local bus and rail operator SBS Transit Ltd  (SGX: S61).

You can learn more about ComfortDelGro in here and here. You can also look up the previous quarter’s earnings here.

Financial highlights

The following’s a quick summary of ComfortDelGro’s latest financials:

  1. Quarterly revenue rose by 1% to $1.05 billion on a year-on-year comparison. Sales growth came mainly from the Bus and Taxi operations.
  2. Net profit attributable to shareholders increased by 5.5% year-on-year to $85.2 million.
  3. Earnings per share (EPS) also increased from 3.78 cents in the third-quarter of 2014 to 3.97 cents in the reporting quarter.
  4. For the third-quarter of 2015, cash flow from operations was $225.8 million with capital expenditures clocking in at $148.8 million. This gives ComfortDelgro positive free cash flow of $77 million, up from the figure of $31.9 million seen a year ago (cash flow from operations of $168.9 million and capex of $137 million).
  5. As of 30 September 2015, ComfortDelGro had $761.9 million in cash and equivalents and $758.2 million in debt. While the transport giant still has a strong balance sheet that’s in a net-cash position, this is still slightly weaker compared to a year ago when it had $748.8 million in cash and equivalents and $733.4 million in debt.

In summary, we saw ComfortDelGro’s revenue-growth grind to a halt, though there was some increase in the bottom-line. This is a familiar pattern that was seen in the previous two quarters too.

Meanwhile, ComfortDelGro also reported positive free cash flow, which is a welcome development after the last sequential quarter’s negative free cash flow.

Operational highlights

Revenue for the Bus operations was $546.2 million for the reporting quarter, an increase of 3.4% year-on-year. Both SBS Transit and the UK operations demonstrated top-line growth, but the Australian Bus business was hampered by currency exchange headwinds due to a weaker Australian dollar.

Singapore and China operations lead the way for the Taxi segment, in terms of revenue increases. This was offset by weaker results from UK and Australia. In all, revenue for the third-quarter for ComfortDelGro’s taxi operations was $335.2 million, a 2.4% year-on-year increase.

It is worth pointing out that the Automotive Engineering Services business segment had undid most of the growth in the Taxi and Bus segment. Revenue for the segment fell 15.1% year-on-year due to lower prices for the sale of diesel.

There was little change in the management team’s outlook. ComfortDelGro expects to see growth from its Bus, Taxi, and Rail operations. The company continues to face keen competition and cost pressures.

Foolish summary

At its closing price last Friday of $2.98, ComfortDelGro traded at around 21.6 times its trailing earnings and has a 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.