3 Things About Comfortdelgro Corporation Ltd That Investors Should Know Now

Comfortdelgro Corporation Ltd (SGX: C52) is one of the largest land transport companies in the world with a total fleet size of over 46,500 buses, taxis, and rental vehicles. Its business operations are found mainly in Singapore, Australia, the United Kingdom, and China.

Here are three things about the company that investors may want to know.

1. Latest quarterly results

Comfortdelgro had reported its 2016 first-quarter earnings just last week. It was a quarter of growth for the company. Revenue was up by 3.3% to $996 million while profit climbed by 8.6% to $73.4 million.

Moreover, the company’s free cash flow had also jumped substantially from $13 million in the first-quarter of 2015 to $144.4 million in the reporting quarter.

Looking ahead, Comfortdelgro sees growth in its Rail operations as a result of the opening of the Downtown Line Stage 2 in Singapore. But, it warned too that its Bus business could face lower revenue and that the overall business is still facing cost pressures.

2. Oil prices

As a transport company, Comfortdelgro relies mostly on fossil fuels to run its fleet of vehicles. With oil down from over US$100 per barrel in 2014 to less than US$30 per barrel earlier this 2016, the company has benefitted from the lower oil price; Comfortdelgro’s fuel and electricity costs had declined by 25% in the first-quarter of 2016.

Yet, in the past few weeks, oil has rebounded to nearly US$50 per barrel. Should the price of oil continue to climb, it might eat into Comfortdelgro’s bottom-line.

3. A strong dividend history

Comfortdelgro has been paying an annual dividend over the last 10 years from 2005 to 2015. Its dividends have also been maintained at a level of between S$0.05 per share and S$0.09. At the company’s latest share price of $2.80, its dividend yield is 3.2% thanks to its dividend of S$0.09 per share in 2015.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.