TRANSPORT operator ComfortDelGro on Thursday (Feb 29) announced a net profit of S$102 million for the second half of 2023, up 76.5 per cent from S$57.8 million in the year-earlier period.

This was backed by a 4.2 per cent revenue jump to S$2 billion, from S$1.9 billion in H2 FY22.

The company thus recorded a full-year net profit of S$180.5 million, up 4.3 per cent from S$173.1 million in FY22. 

If adjusted to exclude the one-off gain recognised in FY22 from the sale of the Alperton property in London, the earnings had in fact risen 26.6 per cent, from FY22’s S$142.6 million, the company highlighted.

This was achieved on the back of sustained improvements in the company’s core public transport and taxi and private hire segments throughout the year, noting that its FY23 operating profit excluding non-recurring items grew 13.7 per cent to S$265.7 million.

The group’s FY23 public transport segment revenue increased 2.5 per cent to S$3 billion compared to the previous corresponding period, although operating profit dropped 3.4 per cent to S$117.8 million and operating margin dropped to 4 per cent from 4.2 per cent. Speaking at the group’s FY23 results briefing on Thursday (Feb 29) Christopher White, the vice-president for group investor relations at ComfortDelGro, said that the segment saw lower margins on re-contracting in Singapore and Australia, which was offset by higher revenues from bus contract renewals and indexing in the United Kingdom, as well as increased ridership and fare increases in Singapore.

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Full-year revenue from its taxi and private hire segment increased 3.6 per cent to S$574.7 million, while operating profit increased 52.4 per cent to S$106.1 million and operating margin rising to 18.5 per cent from 12.5 per cent. White said that this was helped by the introduction of a platform fee on its ride-hailing app CDG Zig from July 2023, despite Singapore booking volumes falling to around 32 million from 34 million. Lowered taxi rental discounts in both Singapore and China also contributed.

FY23’s results translates to an earnings per share of 8.33 Singapore cents, against 7.99 cents the year before. H2 earnings per share came in at 4.71 cents, up from 2.67 cents in the year-earlier period.

Full-year revenue climbed 2.6 per cent to S$3.9 billion.

With these, the board proposed a final one-tier dividend of 3.76 Singapore cents per share, against a dividend of 4.22 cents per share in the corresponding period in FY22, which had a special dividend of 2.46 cents built in.

H2 FY23’s proposed dividend would bring the full-year dividend to 6.66 cents per share. This puts the year’s payout ratio at 80 per cent, in line with ComfortDelGro’s updated dividend policy to pay out at least 70 per cent of net profit, the company nevertheless pointed out.

Commenting on FY23’s performance, Cheng Siak Kian, the managing director and group chief executive officer of ComfortDelGro, also speaking at the company’s results briefing, said that the group had focused on growing and defending its core transport businesses, citing the example of it maintaining the size of its taxi fleet since 2019 and acquiring Australian taxi network operator A2B in December 2023. He added that the company is also focused growing into new territories and new capabilities, with its global rail business demonstrating notable growth, with some recent successes in Europe.

In 2023, the group secured an 11-year contract to operate and maintain the Stockholm Metro, as well as a separate six-year contract for a metro line in Paris, although it was unable to divulge the value of the contracts citing client confidentiality.

In the year ahead, the group will be focused on leveraging its expertise in public transport to win new tenders in existing and new geographies, growing its point-to-point mobility business, and expanding its service offerings in its key markets, added Cheng.

Cheng said that headwinds from geopolitical issues, such as the Ukraine conflict affecting energy prices, had “mellowed down” compared to two years ago.

Energy prices will see some fluctuations, he added, but that risk has been mitigated through the group’s hedging policies, though the company remains cognisant of possible further uncertainties.

Shares of ComfortDelGro closed down 1.5 per cent at S$1.35 on Thursday, before the results announcement.