ComfortDelGro operating profit down 59.6% in Q3

All segments report lower revenue for the quarter.

ComfortDelGro's (CDG) operating profit fell by 59.6% YoY to $44m in Q3, according to a bourse filing. Revenue is 16.3% down to $816.5m over the same period.

Compared to Q2, Q3 revenue improved 22.9%.

For YTD September 2020, operating profit is down 84.7% to $50.6m, whilst revenue shrunk 19.3% to $2.34b on the back of lower revenue from public transport, taxi, and automative engineering services.

Lower revenue from all three segments also contributed to the lower revenue in Q3. Public transport services’ revenue dropped by $86.1m, whilst revenue from taxi and automative engineering services fell by $49.8m and $21.9m, respectively.

Impairment provisions for YTD September totalled $48.3m on various businesses, whilst operating costs improved by 12.7% to $2.24b from $2.57b previously.

Although CDG said its business outlook has improved, it noted that the risk environment continues to be fraught with uncertainties, and it sees a prolonged and uneven recovery ahead for economies and businesses.

In Singapore, many economic activities have resumed, leading to a recovery of public transport ridership of rail, bus, and taxi to 55%, 70%, and 80% of pre-COVID levels.

Restrictions continue to be in place for large-scale events and nightlife activities, although the government has negotiated and is negotiating green-lane travel arrangements in several nations.

The government has also extended reliefs and assistance, with the JSS wage subsidy of up to 30% for the transport sector extended until August 2021. Special relief fund for taxis and PHV have also similarly been extended to March 2021.

In China, pandemic has largely been brought to control with the group’s taxi fleet hire-out rate hitting more than 90%, although no further rental discounts have been given. Government support has also completely ceased.

In Australia, there was minimal impact to CDG Australia’s public bus business in New South Wales and Victoria, although things were bleaker at Melbourne, which had to be put on lockdown in July and only lifted on 28 October due to a spike in the number of cases.

Charter business in Australia also remains sluggish.

Outlook for UK and Ireland remains muted, with CDG noting a worsening resurgent of infection cases across cities over the past weeks. A second national lockdown has taken place beginning 5 November until 2 December, and whilst 100% public bus services will continue in London locals may review service frequencies in light of tightened measures.

As a result, CDG expects taxi, coach and charter businesses in UK and Ireland to be badly hit. On the upside, government will extend the furlough payments through to March 2021. Scottish and Irish governments have also committed to coach services payments until March 2021.