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ComfortDelGro Corporation Ltd’s Latest Earnings: Uninspiring Profits

ComfortDelGro Corporation Ltd (SGX: C52) is a land-transportation conglomerate with business interests in bus, taxi and rail services.

Apart from Singapore, it has a presence in six other countries, namely, China, United Kingdom, Australia, Malaysia, Ireland, and Vietnam.

ComfortDelGro announced its financial results for the full year ended 31 December 2018, yesterday.

Here are some of the key financial highlights from the latest full-year results:

1) Revenue grew 6.4% year-on-year to S$3.81 billion.

2) Total operating costs followed suit – increased by 6.3% to S$3.37 billion.

3) As a result, operating profit rose slightly by 2.8% to S$358.8 million.

4) Profit attributable to shareholders saw a 0.6% rise, from S$301.5 million to S$303.3 million.

5) Consequently, earnings per share moved from 13.95 cents to 14.01 cents, up 0.4%.

6) As of 31 December 2018, Comfortdelgo’s balance sheet had S$586.1 million in cash and bank balances, and S$569.9 million in total debt. This translates to a net cash position of S$16.2 million. This is lower year on year,  when Comfortdelgro reported a net cash position of S$273.9 million.

7) Operating cash flow, improved by 14.9%, from S$581.9 million a year ago to S$668.8 million. Net capital expenditure, on the other hand, decreased from S$283.6 million to S$226.1 million. This resulted in Comfortdelgro’s free cash flow surging by 48.4%, from S$298.3 million to S$442.7 million.

8) A final dividend of 6.15 cents was declared bringing the full year dividend to 10.5 cents, increasing by 0.96% year on year.

The increased top-line of 6.4% to S$3.8 billion for 2018 was due to higher revenue from new acquisitions and an increase in revenue from Public Transport Services, Inspection & Testing services, and Driving centre businesses. This was offset by weakness seen in the Taxi Business and the Automotive Engineering Services Business.

Operating costs increase in line with revenue due to higher staff cost, higher fuel, and electricity cost and higher repair and maintenance requirements. 

Outlook

Going forward, Comfortdelgro commented that revenue from its Public Transport services in Singapore is expected to grow together with its Australian Bus Business. The Taxi business is expected to be maintained amidst the keener competitive environment. Other business segmented expected to be maintained are its Automotive engineering services, Inspection & Testing services, and Driving centre businesses. Lastly, its Car rental and Leasing business are expected to be lower.

Comfortdelgro also commented:

“The operating environment is expected to remain challenging. The Group will continue to manage costs prudently and seek growth and acquisition opportunities”

Comfortdelgro’s share price ended the day on Wednesday at S$2.38, resulting in a price-to-earnings ratio of 16.9 and a dividend yield of 4.4%.

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The Motley Fool Singapore writer, Esjay, contributed towards this article. Esjay does not own shares in ComfortDelGro.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. David Kuo does not any of the shares mentioned.