ComfortDelGro Corporation Ltd’s Latest Earnings: What Investors Need to Know

On Friday, ComfortDelGro Corporation Ltd (SGX: C52) announced its 2017 third-quarter earnings. The reporting period was from 1 July 2017 to 30 September 2017.

Here’s a quick rundown of the financial figures from the latest quarter:

1. Revenue for the period came in at S$991.4 million, down 2.4% year-on-year. The transport giant cited “strong competition” for the fall in top line.

2. Net profit slumped 8.2% to S$80.1 million.

3. Consequently, diluted earnings per share for the quarter was 3.70 Singapore cents, down from 4.04 cents seen a year ago.

4. As of 30 September 2017, ComfortDelGro had S$538.1 million in short-term deposits and bank balances, and S$350.1 million in total debt. This gives a net cash position of S$188 million. The latest figure is a deterioration from the end of last year when the firm had S$434.2 million in net cash.

5. A positive for the quarter was that cash flow from operations surged 65.9% year-on-year to S$171 million. With capital expenditure coming in at S$116.6 million, the firm generated S$54.4 million in free cash flow. A year ago, it a negative free cash flow of S$31.2 million.

The most significant contributor to revenue, the Public Transport Services business, saw its revenue improve 4.5% year-on-year to S$601.5 million. The increase was due to higher revenue from SBS Transit Ltd (SGX: S61) and favourable currency translation from the stronger Australian Dollar and Sterling Pound.

The next biggest contributor, the Taxi business, posted an 11.2% decline in revenue to S$298.3 million on the back of “increased competition”. In Singapore, the taxi business did not do well due to a smaller operating fleet, introduction of flexi rental schemes and the passing on of Land Transport Authority’s diesel tax rebate to drivers in the form of taxi rental discounts.

The managing director of ComfortDelGro, Yang Ban Seng, said:

“The operating environment has been difficult. Although the public transport services business continued to grow, the taxi business has seen strong competition. But we are in this business for the long haul and we will continue to look at sustainable strategies through strategic alliances. We will also continue to look for opportunities to grow our business in Singapore and overseas.”

At the end of August this year, the firm announced that it is in talks with Uber to form a potential strategic alliance, but there have been no updates so far.

The following slide shows the revenue outlook for the different business segments of ComfortDelGro:

Source: ComfortDelGro’s 3Q 2017 earnings presentation

ComfortDelGro’s shares last changed hands at S$2.00 on Friday. The company had a trailing price-to-earnings ratio of 13.8 and a dividend yield of 5.2%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of SBS Transit Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.