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ComfortDelGro Q1 profit falls 56.9% to $32.8m amid ‘inflationary cost pressures’

SINGAPORE - Transport operator ComfortDelGro on Monday posted earnings of $32.8 million for its first fiscal quarter of 2023 ended March, down 56.9 per cent from $76.1 million in the corresponding year-ago period.

ComfortDelGro noted that Q1 2022 included an exceptional gain of $37.2 million on the disposal of its Alperton property in London, and that these figures were prior to the full impact of post-Covid-19 inflation and the Ukraine conflict.

The company’s revenue for Q1 2023 inched up 2.1 per cent to $906.4 million from $887.5 million, while operating profit on a year-on-year basis was down 51.6 per cent to $50.9 million.

Operating costs for the quarter, meanwhile, were up 4.9 per cent to $767.5 million.

The group attributed these softer financial figures primarily to “inflationary cost pressures” on the public transport services division.

Segmentally, revenue for the company’s public transport services rose by 1.5 per cent in Q1 to $714.3 million, on the back of improved rail ridership and fare increases.

These were, however, partially mitigated by contract renewals in Australia at lower margins, lower bus margins in Singapore on five bus packages that were part of the Downtown Line settlement, as well as a 4.4 per cent increase in operating costs to $693.1 million on the back of driver shortages, increased wages and inflation.

Revenue for the taxi division was up 2.9 per cent to $109.4 million on the back of taxi trip commissions that were introduced in Singapore in May last year. This was partially offset by lower utilisation levels in China.

Operating costs for the segment were also up 2.2 per cent to $96.7 million due to inflation and increased IT costs, the company said.

For the automotive engineering services division, ComfortDelGro’s revenue rose 1.1 per cent to S$47 million. The topline contributions in the inspection and testing services division went up by a meagre 0.4 per cent to $27.7 million on the back of “inflationary cost pressures”.

Geographically, ComfortDelGro said Singapore is showing “signs of slowing economic growth”.

Over in Australia, there are driver shortages but also new terms from successful re-tenders, the company said. In Ireland and the UK, a recovery is underway after a tumultuous 2022. China is undergoing a reopening after most Covid-19-related restrictions were lifted early this year, the company added.

Oil and gas prices are now tracking lower, but remain volatile due to the Ukraine conflict and the Organization of the Petroleum Exporting Countries (Opec), said ComfortDelGro.

It noted that interest rates remain elevated, but the group retains its net cash position. It has available facilities of about $775 million in various currencies and will continue to monitor the situation.

Shares of ComfortDelGro closed flat at $1.18 on Monday prior to the results announcement. THE BUSINESS TIMES