ComfortDelgro Corporation Ltd’s Latest Earnings: Another Stalled-Year, But the Dividend Is Up

Last Friday, ComfortDelGro Corporation Ltd (SGX:C52) reported its earnings for the year ended 31 December 2016.

As a quick background, 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 44,700 buses, taxis, and rental vehicles. The company is also the majority owner of vehicle and non-vehicle testing and inspection outfit Vicom Limited (SGX:V01), and bus and rail services provider SBS Transit Ltd  (SGX:S61).

You can learn more about ComfortDelGro in here and here. You can also look up the results from the previous quarter here.

Financial highlights

The following’s a rundown on some of the latest financial figures for ComfortDelGro:

  1. Revenue for 2016 fell by 1.3% to $4.06 billion.
  2. For the full year, net profit attributable to shareholders increased by 5% to $317.1 million. The land transport operator benefitted from lower operating costs and lower financing cost.
  3. Consequently, the company’s earnings per share (EPS) also increased from 14.01 cents in 2015 to 14.68 cents in 2016.
  4. For 2016, cash flow from operations was around $703 million with capital expenditure coming in at around $467 million. This gave ComfortDelGro positive free cash flow of $236 million, an improvement from the free cash flow of $212.5 million recorded in 2015.
  5. As of 31 December 2016, the company had $779.3 million in cash and equivalents and $345.1 million in debt. This is an improvement compared to a year ago when it had $787.8 million in cash and equivalents and $558.6 million in debt.

In 2015, ComfortDelGro experienced revenue growth of just 1.5%. The story did not improve in 2016, when revenue declined by 1.3%, as already mentioned. On the flipside, the land transport firm reported better free cash flow and ended the year with a stronger balance sheet.

ComfortDelGro also proposed a final dividend of 6.05 cents per share. Together with the interim dividend of 4.25 cents per share, the total dividend for 2016 is 10.3 cents per share. This a 14% improvement from the dividend of 9.0 cents per share paid out in 2015.

Operational highlights and a future outlook

Public Transport Services revenue was $2.307 billion in 2016, down 1.1% from 2015 due to currency exchange headwinds. In 2016, the Taxi business grew revenue by 1.1% to $1.34 billion.

ComfortDelGro also provided an outlook for 2017 in its earnings release. The land transport operator expects to see growth from its Public Transport Services business; the company expects to benefit from a full year’s worth of contribution from the New Bus Contracting Model in Singapore and an increase in ridership for rail services here. But, there are worrying signs as every other segment is expected to have lower revenue. This includes the Taxi business.

At their closing price of $2.51 each last Friday, ComfortDelGro’s shares carry a trailing price-to-earnings ratio of 17.1 and a dividend yield of 4.1%.

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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.