ComfortDelGro posts 5.6% rise in full-year net profit

ComfortDelGro released its 2012 earnings results on Friday.

The taxi, bus and rail company saw its full-year net profit rise 5.6 per cent to S$248.9 million.

This came on the back of record revenue, which increased 3.9 per cent on-year to S$3.55 billion.

The taxi and bus businesses accounted for over 87 per cent of revenue growth during the year.

"Despite the significant challenges the Group faced in 2012, including weakened demand in some markets, we managed to seek out opportunities to expand and remain thankful that we were able to deliver another year of growth," said ComfortDelGro's managing director and group CEO Kua Hong Pak.

Bus revenue at SBS Transit increased by 6.1 per cent to S$600.9 million as average daily ridership grew by 3.1 per cent, more than compensating for a 0.5 per cent drop in average fares. For its core bus business, however, SBS fell further into the red, incurring an operating loss of S$14.7 million compared to S$6.0 million the year before.

Revenue from the taxi business was 10.1 per cent higher at S$824.5 million due to higher rental income from a larger fleet, new replacement taxis and a higher volume of cashless transactions.

Revenue from the rail system was also up 3 per cent to S$138.6 million as ridership grew.

Operating profit for the rail business fell 75 per cent to S$4.9 million due to higher staff costs from the start up of the Downtown Line.

The company's operating costs, however, were 4 per cent higher in 2012, topping out at S$121.1 million - mostly due to higher bus captains' salary and the foreign workers' levy.

Operating profits were up 3.3 per cent to S$412.3 million in 2012. Singapore accounted for 53.8 per cent of Group operating profit.

Mr Kua said he hopes 2013 will be a year of expansion.

He said: "We are always looking out for opportunities to expand, especially in the markets that we are in, and as you know, in the third quarter of last year, we were able to extend our presence in Australia to the acquisition of the Dean's bus line. We hope to do more of that this year and the years to come."

ComfortDelGro has proposed a final dividend of 3.5 cents per share.

This brings total dividend for the year to 6.4 cents a share, including the interim dividend of 2.9 cents a share.

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While it is important that private entities generate profits, it should not be done with a compromise in services. It is undesirable that the bus sector is still making losses. Ridership rose 3%, and LTA will have to do something to ensure that SBS is able to cope with the rise and not simply squeeze the public commuters further.