ComfortDelgro Corporation Ltd’s Latest Earnings: Profit’s Up, But There’s a Tough Road Ahead

Last Friday, ComfortDelGro Corporation Ltd (SGX:C52) reported its 2017 first quarter earnings.

As a quick background, ComfortDelGro is a land transport firm with operations in seven countries, including Singapore, Australia, the United Kingdom, and China. The company has a total fleet size of over 44,700 buses, taxis and rental vehicles. You can catch up with the results from the company’s previous quarter here.

Financial highlights

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

1. Revenue was down 2.4% year-on-year to $972 million.

2. But, net profit attributable to shareholders was up 12.4% year-on-year to $82.5 million.

3. Consequently, earnings per share (EPS) was 3.82 cents, 12.4% higher from the EPS of 3.40 cents in 2016’s first quarter.

4. Cash flow from operations for the reporting quarter was $59.9 million and net capital expenditure was $39.3 million, giving rise to positive free cash flow of $20.6 million. In the same quarter a year ago, the company generated higher free cash flow of $153 million.

5. As of 31 March 2017, ComfortDelGro had $639.2 million in cash and equivalents and $391.3 million in debt. A year ago, ComfortDelGro had $887.9 million in cash and equivalents and $487 million in debt, so its balance sheet has weakened.

ComfortDelGro saw its revenue decline but was able to grow its profit. The firm said that negative foreign currency translations affected its revenue and that sales would have been up slightly if not for the currency impact. The firm also reported lower free cash flow and a weaker balance sheet compared to a year ago.

Operational highlights and what lies ahead

The company’s Public Transport Service revenue was $561.5 million for the quarter, up 0.8% year-on-year. Growth was driven by higher revenue in Singapore and Australia.

Meanwhile, revenue from Taxi operations fell by 5.7% year-on-year to $314.6 million. The segment’s decline was caused by lower sales in Singapore, UK, China, Australia, and Vietnam.

Looking ahead, ComfortDelgro expects to see growth from its Public Transport Services business. Unfortunately, the company expects revenue declines in almost all of its other businesses including Taxis, Automotive Engineering services, Inspection and Testing, and Car Rental.

ComfortDelGro shares closed at a price of $2.69 each on Friday. At that price, the company was valued at 17.8 times earnings and had a dividend yield of 3.8%.

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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 doesn’t own shares in any companies mentioned.