Transport giant ComfortDelGro Corp lifted its bottom line in the third quarter despite sharply lower contributions from its Singapore operations.
Earnings were 5.4 per cent up over the same period a year earlier to $76.7 million, while revenue was 8.6 per cent ahead at $978.4 million for the three months to Sept 30.
The group, with businesses in China, Australia, Vietnam and Britain, recorded a 9.2 per cent increase in operating expenses to $856 million, led by a 16.1 per cent hike in staff cost to $321.8 million.
Operating profit rose by 4.8 per cent to $122.4 million, with slightly more than half accounted for by overseas units.
Group chief executive Kua Hong Pak said in a statement yesterday: "Business conditions continue to be challenging. We have, and will, continue to look for new avenues of growth, especially in the overseas markets."
ComfortDelGro's British business posted a stellar 38.6 per cent rise in revenue to $202.3 million, fuelled by a $54.2 million maiden contribution from its newly acquired Metroline West unit.
In Singapore, taxis continued on the growth path, with revenue rising by 8.1 per cent to $227.4 million.
This was driven by higher rentals, a larger fleet and more cashless transactions.
But its Singapore bus and rail businesses faced intense cost pressures. Higher headcount in preparation for the MRT Downtown Line, increased repairs and maintenance as well as steeper depreciation charges from an expanded bus fleet all weighed on its bottom line. The absence of fare revisions last year and this year made things worse.
The group forecasts things will improve. It said in its outlook that revenue from the Singapore bus and rail businesses is expected to increase.
Revenue from the bus business in Britain is also expected to increase with the contribution of Metroline West. But revenue from the Australian bus division is likely to be lower.
Earnings per share rose from 3.48 cents to 3.61 cents, while net asset value per share was 98.05 cents, up from 95.54 cents as at Dec 31.
ComfortDelGro posted a net cash outflow of $17.3 million for the quarter. As at Sept 30, it had cash and equivalents of $770.1 million. After accounting for $866.8 million in borrowings, it had a gearing of 3.6 per cent - up from 0.3 per cent at the end of last year.
OCBC Research analyst Lim Siyi said the third-quarter results "beat my expectations by quite a bit", while the full-year numbers should surpass last year's $249 million. "They will end with a good year," he added.
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