ComfortDelgro Corporation Limited’s Latest Earnings: Currency Headwinds Holds Back Sales

Last Friday, ComfortDelgro Corporation Limited (SGX:C52) reported in its third-quarter earnings. The reporting period was for 1 July 2016 to 30 September 2016.

ComfortDelgro is a global land transport giant with operations mainly in Singapore, Australia, 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 bus and rail operator SBS Transit Ltd (SGX:S61).

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

Financial highlights

Here’s a rundown on the financial figures for Comfortdelgro:

  1. Revenue slipped by 3.1% to $1,015 million. Sales was dragged down by lower bus, bus station and automotive engineering services revenue.
  2. For the reporting quarter, net profit attributable to shareholders increased by 2.5% year on year to $87.3 million.
  3. Diluted earnings per share (EPS) was 4.04 cents, up 2.3% from the 3.95 cents reported in the same quarter last year.
  4. For 2016’s second quarter, cashflow from operations was $103.1 million with capital expenditure clocking in at $134.3 million. The combination gave ComfortDelgro negative free cash flow of around $31.2 million.    
  5. As of 30 September 2016, ComfortDelgro had $705.3 million in cash and equivalents and $446.3 million in debt. This is an improvement from the end of last year, where ComfortDelgro had $787.8 million in cash and equivalents and $558.6 in debt.

ComfortDelgro saw its sales decline, in part due to weaker currencies. The British pound and Renminbi fell, costing the company $47.9 million in foreign currency translation. Free cash flow was also negative during the quarter. On a brighter note, the land transport firm also maintained a net cash balance sheet.

Operational Highlights

Bus business revenue was $506.4 million for the 2016’s third quarter, an decrease of 7.3% year on year. Sales fell in part due to a weaker pound. Meanwhile, the taxi business grew by 0.2% year on year to $335.9 million. The segment’s growth was eroded a weaker pound and renminbi.

Rail business sales soared 26.3% year on year to around $69.1 million. Revenue for the inspection and testing business was also up 1.9% year on year to $26.9 million. The Automotive Engineering Services Business saw its revenue decline by 10% to record $82.8 million for the reporting quarter.


Looking ahead, ComfortDelgro expects to see growth from its rail operations.

Elsewhere, ComfortDelgro expects its revenue for its UK  bus business to be lower due to the weaker pound. ComfortDelgro also expects the automotive engineering services business revenue to be down due to lower volume of diesel sold.  

Foolish summary

At its closing price last Friday of $2.46, ComfortDelgro traded at around 16.8 times trailing earnings with a dividend yield of around 3.7%.

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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.