ComfortDelGro posts modest rise in net earnings

Transport giant ComfortDelGro posted a modest 0.6 per cent rise in net earnings to $303.3 million for the year ended Dec 31 as weaker taxi and automotive engineering performances offset a strong public transit segment.

The absence of a special dividend from Australian unit Cabcharge and a drop in investment income also weighed on its bottom-line.

The Singapore-based global group reported a 6.4 per cent rise in revenue to $3.81 billion, with contributions from new acquisitions making up more than half of the increase.

These acquisitions contributed to a $20.7 million growth in operating profit, while existing businesses contributed $10.7 million.

Group operating expenses rose by 6.3 per cent to $3.37 billion, with the biggest jumps in fuel and energy costs, as well as staff cost.

Earnings per share rose from 13.95 cents in 2017 to 14.01 cents last year. Net tangible asset value per share stood at 120.7 cents, down from 121.01 cents. Margin before tax and depreciation narrowed from 22.9 per cent to 21.9 per cent.

ComfortDelGro chief executive Yang Ban Seng said: "2018 was a watershed year for the group, marked by our most aggressive expansion programme yet. We invested $439.4 million overseas alone - the bulk of which was in Australia.

"Our M&A activities have started to bear fruit, giving a much needed boost to our existing businesses."

In response to queries at its results briefing yesterday, Mr Yang said the drop in taxi earnings came more from China. In Singapore, the group had scrapped "a lot of unhired cabs... and replaced those bought with high COEs".

The replacement vehicles are hybrids, saving the group in diesel tax. They also fetch a higher rental of around $117 per day, as compared with around $98 for the diesel-powered Hyundai Sonata.