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3 Things Investors Should Know From ComfortDelGro Corporation Ltd’s Latest 2016 Full Year Results

ComfortDelGro Corporation Ltd (SGX: C52) is a land transport company with operations mainly in Singapore, Australia, the United Kingdom, and China. It provides public bus services, rail services, taxi services, vehicle testing services and more.

The company recently reported its 2016 full year results. Let’s look at three useful pieces of information from the results announcement:

1. The overall result

The following table shows some important items from ComfortDelGro’s income statement from 2016 and 2015:Comfortdelgro income statement table
Source: ComfortDelGro 2016 full year earnings presentation

ComfortDelGro saw its revenue decline, but other than that, it delivered a pretty positive full year performance with the lower costs and higher profitability.

The lower revenue was caused by unfavorable currency movements. Excluding the currency effects, ComfortDelGro’s revenue would have been up by 1.8% in 2016.

2. Performance of the various businesses

The table below shows the revenue and operating profit performance for ComfortDelGro’s various business segments:

Comfortdelgro segment performance table
Source: ComfortDelGro 2016 full year earnings release

We can see that other than the Taxi and Driving Centre business, all other segments reported weaker revenue compared to 2015.

Yet, only the Inspection & Testing and Car Rental & Leasing segments experienced weaker operating profit. It appears that ComfortDelGro has been managing its costs well.

3. 2017 outlook

As we’ve seen, 2016 was a marginally positive year for ComfortDelGro. But, how would 2017 look like for the company? Here’s a quick overview of the company’s revenue forecast for 2017:

Comfortdelgro forecast table
Source: ComfortDelGro 2016 full year earnings presentation

In terms of revenue, the outlook given by ComfortDelGro for 2017 is rather bleak – all segments, except for Public Transport Services and Driving Centre, are expected to post lower revenue.

As such, whether ComfortDelGro can maintain its 2017 revenue at 2016’s level will depend on how much growth the Public Transport Services business can deliver, given that it is the company’s largest business segment. Also, cost-controls will be crucial for the company if it wants to deliver profit-growth in 2017.

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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.