SINGAPORE – A continued rebound in its taxi, private car hire and public transport divisions lifted full-year earnings at ComfortDelGro, it reported on Feb 29.
The transport giant posted net profit of $180.5 million for the 12 months to Dec 31, 2023, up 4.3 per cent from $173.1 million in 2022, while revenue expanded 2.6 per cent to $3.88 billion.
If a one-off gain of $30.5 million from the sale of the group’s Alperton property in London in 2022 is excluded, full-year earnings would have risen 26.6 per cent on the back of robust demand in Singapore.
Net margins ticked up to 4.7 per cent from 4.6 per cent in 2022, or 3.8 per cent if adjusted for the one-off property sale gain. Operating costs for the transport group rose 2.8 per cent to $3.6 billion, which the company said was in line with increased revenue.
The taxi and private-hire business had the biggest jump in operating profit, up 59.5 per cent to $106.7 million.
This was mainly due to lower expenses and higher income from the lower taxi rental discounts in Singapore and China, as well as the 70-cent platform fee that the company started charging in July 2023 for bookings made via its CDG Zig app here.
Its point-to-point transport booking volumes in Singapore stood at about 32 million in 2023, down from about 34 million in 2022.
The firm recorded an operating profit of $120.4 million in its public transport unit, 26.2 per cent lower than in 2022.
While revenue improved thanks to better rail ridership and higher public transport fares here, lower margins for bus contract renewals in Singapore and Australia put a drag on earnings.
Capital expenditure in 2023 was higher at $367.5 million, mainly due to continued efforts to electrify its bus and taxi fleet in Singapore, China and Britain.
The company had about 175 electric taxis in its stable of roughly 8,800 cabs here as at the end of 2023, with hybrid and electric taxis making up about 70 per cent.
Capital also went into expanding its private-hire fleet in Singapore. In 2022, the company had about 600 private-hire cars. It did not provide updated figures for 2023.
ComfortDelGro said capital expenditure is expected to continue to rise to the $400 million to $500 million range, the typical outlay before Covid-19.
The firm said rail revenue is expected to increase in 2024 with higher ridership and fare increases. However, public bus turnover could take a hit from September, after it lost out on the Jurong West bus package to SMRT.
The company is awaiting the results of several ongoing tenders, including for the Jurong Region Line and Cross Island Line, which is expected by the end of 2024.
Taxi and private-hire revenues will also grow in 2024 in the light of its 70-cent platform fee, as well as taxi fare and commission hikes introduced in December 2023.
Chief executive Cheng Siak Kian said the company’s global rail business has demonstrated notable growth, with some recent successes in Europe.
He told The Straits Times that the rail business is a key pillar that ComfortDelGro wants to strengthen, adding that the firm is participating in a tender to operate the Docklands Light Railway in London, as the contract to run the metro network ends in 2025.
It is also working with an unnamed partner to bid for the operation and maintenance of the Sydney Metro West rail project, which is under construction.
Mr Cheng said the company has made representations in relation to the point-to-point transport sector review being conducted, pointing out the benefits that taxis bring to the ecosystem, including better reliability and availability.
He said the hope is that the Land Transport Authority will allow cab companies to compete on a more level playing field with private-hire vehicle operators.
“Our cost base is higher, and if our cost base is higher, we can’t possibly offer a rental rate that is going to be lower than a private-hire car,” Mr Cheng added.
ComfortDelGro has proposed a final dividend of 3.76 cents a share. This will bring 2023’s total dividend to 6.66 cents a share, a payout ratio of 80 per cent.
Correction note: An earlier version of this story quoted ComfortDelGro chief executive Cheng Siak Kian as saying that the firm has already put in a bid to operate the Docklands Light Railway in London. The firm clarified that it is taking part in the tender, but has not submitted a full proposal. We are sorry for the error.
