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ComfortDelGro Corporation Ltd’s Latest Earnings: The Dividend Is Up, But There’s Little Else to Cheer About

Last Friday, ComfortDelGro Corporation Ltd (SGX:C52) reported its 2016 second quarter earnings. The reporting period was for 1 April 2017 to 30 June 2017.

As a quick background, ComfortDelGro is a land transport company with operations in seven countries, including Singapore, Australia, the United Kingdom, and China. The company has a total fleet size of around 44,000 buses, taxis and rental vehicles.  You can look up the results from the company’s previous quarter here.

Financial highlights

The following’s a rundown on some of ComfortDelGro’s latest financial figures for the second quarter of 2017:

1. Revenue slid 3.4% to $987.2 million.

2. Net profit attributable to shareholders declined 6.8% year-on-year to $79.4 million.

3. Diluted earnings per share (EPS) was 3.67 cents, down 6.9% from the 3.94 cents reported a year ago.

4. Cash flow from operations was $151.1 million and capital expenditure was $57.0 million. ComfortDelGro thus generated free cash flow of $94.3 million in the reporting quarter, up significantly from the $3.8 million reported a year ago ($111.3 million in cash flow from operations and $107.5 million in capex).

5. As of 30 June 2017, ComfortDelGro had $606.6 million in cash and equivalents and $377.1 million in debt. A year ago, ComfortDelgro had $772.8 million in cash and equivalents and $449.7 million in debt.

In all, ComfortDelGro saw declines in both revenue and profit. On the flipside, the company’s free cash flow held up well (there was in fact, growth) and it maintained a net cash balance sheet. The board of directors declared an interim dividend per share of 4.35 cents, up 2,4% from 4.25 cents a year ago.

Operational highlights and future outlook

Public transport services revenue rose to $586.3 million, up from $578.6 million a year ago. Sales benefitted from SBS Transit’s (SGX: S61) transition to the new Bus Contracting Model (BCM) and the increase in ridership at the Downtown Line. ComfortDelGro is a majority shareholder of bus and rail services provider SBS Transit.

Meanwhile, the taxi business felt the pinch with a 10.7% year-on-year decline in revenue to $303.9 million. The segment was hit with a lower taxi fleet and lower revenues in China, Vietnam, and Australia.

The Automotive Engineering Services business saw its revenue decline by 10% to $75.6 million from a year ago. Sales suffered from lower volume of diesel sold to a smaller taxi fleet.

Looking ahead, ComfortDelGro expects to see revenue declines in almost all its segments. The public transport services businesses in Singapore and Australia are the only segments where revenue-improvements are expected.

Foolish summary

Shares of ComfortDelGro closed at $2.31 each last Friday. At that price, it traded at 15.6 times earnings and had a dividend yield of 4.5%.

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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. The Motley Fool Singapore has recommended shares of SBS Transit.