This is the biggest disappointment in ComfortDelgro's 3Q13 results

Operating profit was $2.6m short.

According to Barclays, the main laggard was the rail operation. Operating profit for the rail operation was S$2.6mn less y/y in 3Q13, due to the ramping up of the Downtown Line.

Stage 1 of the Downtown Line is slated to open on 22 December 2013 with six stations initially. Construction progress on Stage 2 is lagging by six months to the original schedule.

Here's more from Barclays:

Stage 2 is now scheduled to open in early 2016. The delay in the construction may raise operating costs. The company will seek compensation for the related increase in costs from the Land Transport Authority of Singapore.

 

We expect +6% EPS growth for 2013 and +3% for 2014, driven by its bus operation in Australia, its taxi operation in Singapore and inspection services in Singapore. We find the valuation expensive at 3.7% 2014E dividend yield vs global toll road operators’ average of 4.3%. Reiterate UW.