ComfortDelGro reports 40.2% rise in net profits to $173.1m
Recovery in taxi and public transport businesses the main drivers of growth; special dividend announced
https://www.straitstimes.com/singap...lgro-reports-402-rise-in-net-profits-to-1731m
SINGAPORE - Land transport giant ComfortDelGro Corp posted a 40.2 per cent rise in net earnings for the year ended Dec 31, 2022 to $173.1 million.
Revenue grew by 7.9 per cent to $3.78 billion, largely on the back of increased rail and taxi ridership as most countries lifted Covid-19 restrictions. Net margin improved to 4.6 per cent, from 3.5 per cent previously.
Operating expenses rose by 6.3 per cent to $3.51 billion, led by higher fuel and energy prices, staff salaries and materials and consumables. The rise in salaries included a backpay deal struck with UK bus drivers in December amounting to $18 million. A new rail electricity contract effective from October contributed to a $15 million cost rise.
Operating profit after taxes grew by 42.9 per cent to $218.5 million, driven by more people commuting and a cut in rental discounts and the introduction of taxi fare commissions. A one-off exceptional gain of $30.5 million from the disposal of the group’s Alperton property in London also contributed. Government Covid-19 related relief dwindled to $19.6 million, from $84.6 million in 2021.
The biggest segmental gainer here was taxis, which posted a 181.6 per cent rise in operating profit to $52.1 million. The public transport businesses was a distant second, with a 28.5 per cent growth to $154.9 million, led by trains. Contributions also came in the form of incentive payments by the Singapore government for meeting bus and rail service standards.
Earnings per share stood at 7.99 cents, up from 5.68 cents in 2021. Net asset value per share at group level stood at 118.59 cents, down from 123.61 cents previously.
ComfortDelGro ended the year with cash and equivalents of $967 million, up from $919.1 million. Borrowings shrank to $313.6 million, from $399.3 million. Hence gross gearing narrowed to 10.5 per cent, from 12.8 pre cent previously.
ComfortDelGro group chief executive
Cheng Siak Kian, who replaced Mr Yang Ban Seng on Jan 1, said: “After two years of sluggishness, the world sprung to life in the second half of 2022. Demand for our services picked up significantly with the resumption of activity, save for China which continued to pursue a zero-Covid policy until December 2022.
“But even as one challenge ebbed, new headwinds have emerged. Significant increases in inflation levels are affecting operations across the group. We are watching these closely and continue to keep a tight lid on costs.”
Chairman Mr Lim Jit Poh, who will retire at the end of the upcoming Annual General Meeting on April 28, added: “2023 is a significant year for ComfortDelGro. We celebrate 20 years of existence, of moving people and of delivering on our promises. It is also the start of a new era at ComfortDelGro, with new leadership navigating new challenges in a new world.”
To mark the milestone, Mr Lim said the board has recommended a special dividend of 2.46 cents in addition to the final dividend of 1.76 cents.
“Together with the interim dividend of 2.85 cents, and the tax-exempt one-tier special dividend of 1.41 cents resulting from the net gain on disposal of Alperton property in London, we will be making a 70 per cent payout of the profit attributable to shareholders for the year,” he said.
In Singapore, which accounted for the bulk of group operating profit, ComfortDelGro now has around 8,500 taxis and 600 private-hire cars. For taxis here, it revealed that street hails made up slightly more than half of rides. Of the remaining, the vast majority were app-hailed rides.