Transport giant ComfortDelGro Corp posted a 4.9 per
cent drop in net earnings to $301.5 million for the year ended Dec
31, 2017 on the back of weaker contributions from all but one of
its core businesses.
With its taxi division continuing to take a beating
from private-hire players, stiff competition in overseas markets
and foreign exchange losses, group revenue shrank by 2.2 per cent
to $3.97 billion.
Total operating expenses rose by one per cent to $3.56
billion, with staff cost climbing by 2.6 per cent or $37.2 million
because of additional people hired for Downtown Line 3.
The Singapore-listed group posted a 0.4 per cent rise
in operating profit for its bus and train division, but all other
units reported lower earnings.
Taxi operating profit fell by 19.3 per cent to $135.1
million, automotive engineering (which includes fuel sales to
cabbies) slipped 33.1 per cent to $33.9 million, and its inspection
unit shrank by 6.3 per cent to $32.6 million on weaker performance
in its Setsco testing division.
Even its driving centre business posted a 7.5 per cent
dip in operating profit to $9.8 million, largely on the failure of
its Chongqing school, which has since closed down.
ComfortDelGro's earnings per share dipped to 13.95
cents, down from 14.72. Its net asset value per share stood at
121.01 cents, up from 114.77.
Its operating margin before interests, taxes and
depreciation shrank from 21.1 to 20.6 per cent.
The group posted a net cash outflow of $183.1 million.
Its cash and equivalents stood at $596.2 million, down from $779.3
million. After borrowings, it had a net cash position of $273.9
million, down from $434.2 million previously. Its gearing ratio was
10.6 per cent, down marginally from 10.8.
Net capital expenditure fell by 27.4 per cent to $283.6
million, mainly on fewer taxi purchases .
ComfortDelGro group chief executive Yang Ban Seng
described 2017 as "very challenging".
"The intense competition from ride-hailing apps has
taken a toll on traditional taxi businesses everywhere," he said on
Tuesday. "We too have not been spared, particularly in Singapore.
But we have taken it in our stride, and continue to strengthen our
relationship with our driver partners and find ways to improve
their earnings."
Mr Yang said the alliance with Uber - which has yet to
be approved by the Competition Commission - should "widen the
revenue base for our driver partners".
He said about 5 per cent of the group's taxi fleet is
currently unhired. The fleet has shrunk by more than 20 per cent to
13,200 since 2014. He said the group would not be buying any more
taxis for the 2018 financial year.
"We expect the operating environment to remain tough,"
Mr Yang added. "We will actively look for opportunities to grow and
expand the business, both in Singapore and overseas."
ComfortDelGro's revenue contribution from overseas was
37.5 per cent last year, with operating profit contribution from
markets such as UK, Australia and China at 40.4 per cent. This
indicates the group's overseas businesses have become more
profitable than those in Singapore.
Directors are recommending a final dividend of 6.05
cents per share - unchanged from the year before.
They expect revenue from buses and trains to rise this
year (2018), while its taxi and automotive engineering units are
expected to decline further.
ST