ComfortDelGro reports six-month loss

Government grants aimed at offsetting fallout from the pandemic were not enough to prevent ComfortDelGro Corp from incurring its first-ever loss.

The transport giant reported a net loss of $6 million for the six months ended 30 June 2020 compared with net profit of $146.3 million for the same period last year. ComfortDelGro said it would have spilt a lot more red ink if not for COVID-19 relief from the Government.

It posted a loss of $75.7 million at the operating level before government relief. Aid amounting to $82.3 million allowed it to post an operating profit of $6.6 million. Revenue fell by 20.8% to $1.53 billion, while operating costs declined 10.8% to $1.52 billion.

It incurred a loss per share of 0.28 cents, from earnings per share of 6.76 cents previously. Net tangible asset per share stood at 114.33 cents, from 119.8 cents as at 31 December 2019. Margins before interest, tax, depreciation and amortisation shrank from 22.5% to 16.2%.

In Singapore, lower public transport ridership and rental waivers for taxi drivers took a toll on its bottom line. The group said its operations in Australia, Britain, China, Ireland, Vietnam and Malaysia had also been hard-hit by the ongoing pandemic. The greatest impact has been from lower public transport ridership and taxi demand, it noted.

Revenue from overseas for the first half was at $677 million or 44.3% of group turnover, versus $805.1 million or 41.8% for the previous corresponding period. Segmentally, ComfortDelGro's public transport revenue was 12.9% lower at $1.23 billion. More unhired cabs drove taxi turnover down 47.2% to $178.6 million.

Revenue from its automotive engineering division was 36% lower at $82.1 million, due partly to the suspension of business during the circuit breaker period. The same applied to its vehicle inspection, driving school and bus station divisions. The only exception was its vehicle rental business, which posted a 4.5% rise in turnover to $13.9 million.

Despite the weaker performance, the group's financial position remained strong. Because of the unprecedented business environment, it made a rare interim provision for impairment on vehicles and goodwill of $30.8 million. The group had cash and equivalents of $619.9 million, versus $553.2 million previously.

After accounting for borrowings of $546.1 million and lease liabilities from financial institutions of $95.7 million, it had a net debt position of $21.9 million, representing a net gearing ratio of 0.8% compared with 1.3% as at 31 December 2019. Its gross gearing ratio stood at 22.3% compared with 21.1% as at 31 December 2019.

The group said the future looks uncertain. "Governments have provided significant temporary relief for the near term but the sustainability of such reliefs is uncertain," it said, noting that a number of cities have had to lock down again because infection cases resurfaced. Revenues are expected to remain depressed and margins under pressure, it added.

Notwithstanding, ComfortDelGro's strong balance sheet allows it to "transform and build its capabilities while looking for growth opportunities in overseas markets". Directors are not recommending an interim dividend in light of this. Last year, the firm paid out 4.5 cents a share.

Chief Executive Yang Ban Seng said that despite the prolonged crisis, it was able to continue running its businesses "without letting any of our staff go". The group has around 20,000 employees here and abroad.