Published August 14, 2008

ComfortDelGro Q2 earnings down 2.9%

SBS Transit posts 56% fall in Q2 profit on rise in fuel and electricity costs

By SAMUEL EE
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A COMBINATION of higher fuel and electricity costs, as well as diesel subsidies to taxi hirers, weighed down ComfortDelGro Corp's net profit for the second quarter ended June 30, 2008, which slipped 2.9 per cent to $56.8 million.

Mr Kua: Tough operating environment is not expected to ease up soon

But Q2 revenue rose 5.8 per cent to $790.1 million on the back of strong growth in bus and rail ridership, mileages operated, and taxi corporate billings.

Overseas turnover accounted for 43.8 per cent of total group turnover, down from 46.7 per cent a year ago mainly because of the weaker pound sterling. ComfortDelGro has extensive bus and taxi businesses in the UK.

'The operating environment has proven to be difficult with the global economic slowdown, rising inflation and high oil prices,' said Kua Hong Pak, ComfortDelGro's managing director and group CEO. 'This is not expected to ease up soon.'
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Click here for Comfort's news release

Financial statements

Operating expenses rose 11.2 per cent to $739.2 million in Q2. Of the $74.2 million increase, fuel and electricity costs accounted for $31.0 million, while purchases of materials and consumables - mainly diesel - accounted for another $33.7 million.
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Click here for SBS's financial statements

The land transport giant said high energy costs were largely responsible for Q2 operating profit plunging 37.7 per cent to $50.9 million.

But the good news was that overseas operating profit accounted for a record 59.6 per cent of total group operating profit - from 41.0 per cent in Q2 last year.

In particular, the operating profit of the overseas bus businesses made up a whopping 89 per cent of the group's total bus operating profit.

Earnings per share in the second quarter were 2.72 cents, down from 2.81 cents in the previous corresponding quarter.

For the first half ended June 30, 2008, net profit was down 6.1 per cent to $107.0 million. Interim revenue was 5.8 per cent higher at $1.54 billion.

H1 earnings per share was 5.13 cents, down from 5.48 cents previously. An interim one-tier tax-exempt dividend of 2.6 cents per ordinary share has been declared.

Higher fuel and electricity costs also put the brakes on listed unit SBS Transit's net profit for the second quarter ended June 30, 2008, causing it to fall 56.0 per cent to $6.39 million.

But Q2 group revenue grew by 8.5 per cent to $180.4 million on increased bus and rail fare revenue, higher advertisement revenue and higher rental income.

Fuel and electricity costs in Q2 had surged 73.7 per cent to $52.4 million compared with the previous corresponding quarter, pushing the bus and rail operator's total operating expenses up by 16.0 per cent to $173.6 million.

Earnings per share fell to 2.07 cents in Q2 from 4.72 cents in the same quarter last year.

For the first half ended June 30, SBS Transit's net profit was 31.3 per cent lower at $21.68 million, while interim revenue was 8.5 per cent higher at $357.1 million.

Interim earnings per share slipped to 7.04 cents from 10.31 cents previously. A one-tier tax-exempt interim dividend of three cents per ordinary share has been declared.