MENU

3 Things Investors Should Know About ComfortDelGro Corporation Ltd’s 2017 Earnings

ComfortDelGro Corporation Ltd (SGX: C52) is one of the world’s largest land transport firms. Its businesses comprise of bus, taxi, rail, car rental and leasing, automotive engineering services, inspection and testing services, driving centres, insurance broking services, and outdoor advertising.

Last week, the company announced its financial results for the full year ended 31 December 2017. Let’s look at three main aspects of the announcement here.

Show me the money

Full-year revenue tumbled 2.2% year-on-year to S$3.97 billion due to a highly competitive environment, especially in the taxi business.

Taxi business revenue slumped 9.9% to $1.21 billion due to keen competition from ride-hailing apps such as Uber and Grab. Revenue at the automotive engineering services business declined 14.3% to S$283.4 million due to the “decrease in revenue from repair and maintenance of taxis and diesel sales to taxi hirers from a smaller taxi fleet”.

In terms of revenue contribution by geography, Singapore contributed to 62.5% of total sales, UK/Ireland took up 22%, while the rest was split between Australia, China, Vietnam and Malaysia.

Total operating costs fell 1% to S$3.56 billion, mainly due to a decline in staff costs. Net profit for 2017 came in at S$301.5 million, down 4.9% year-on-year.

The net profit margin for 2017 stood at 7.6%, down slightly from 7.8% seen a year ago.

As at 31 December 2017, ComfortDelGro had S$596.2 million in short-term deposits and bank balances, and a total debt of S$322.3 million. This translates to a net cash position of around S$274 million. In comparison, at the end of 2016, it had S$434 million in net cash.

Cash flow from operations for the year fell 17.4% to S$581.9 million. With a capital expenditure of S$393.6 million in 2017, free cash flow came in at S$188.3 million. This is down from 2016’s free cash flow of S$238.3 million.

Ka-ching!

The board proposed a final dividend of 6.05 cents per share. Together with the interim dividend of 4.35 cents already paid out, the total dividend for 2017 would be 10.40 cents per share. This represents a payout ratio of 74.6%.

In comparison, for 2016, the total dividend was 10.30 cents per share (an interim dividend of 4.25 cents and a final dividend of 6.05 cents).

What the future holds?

The following presentation slide summarises ComfortDelGro’s business outlook:

Source: ComfortDelGro 2017 Earnings Presentation

It added:

“The Group will continue to explore acquisition opportunities. As the operating environment will continue to be challenging, costs will continue to be managed prudently.”

In all, ComfortDelGro did not perform well for 2017, and it looks like the woes might continue into 2018.

Worried about the overall state of the market? Do you know the 1 thing you should never do in the stock market? The Motley Fool Singapore's new e-book lays out a plan to handle market crashes, details the greatest advantage you have as an investor, and looks at decades worth of market data to bring you the smartest insights on investing. You can download the full e-book FREE of charge--Simply click here now to claim your copy

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