ComfortDelGro Singapore rail ridership back at 88% pre-COVID-19 levels

The firm managed to raise the commission rate for app bookings to 5%.

ComfortDelGro is now back to 88% rail ridership from its pre-COVID-19 levels ahead of the 85% prediction by the end of 2022, a rating report by CGS-CIMB said.

The firm managed to raise its commission rate for app bookings to 5% in October due to improved driver net earnings. Meanwhile, the demand-supply mismatch of point-to-point (P2P) transport (which includes both ride-hailing and taxi) led fares to remain at high levels in Q3 2022 despite easing pump prices. 

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ComfortDelGro’s overseas operations are also seeing recovery through improved charter volumes in the UK and Australia and lower taxi rental rebates in China. However, the recent weakening of the Australian dollar and UK pound could lead to a negative forex translation impact, dampening the group’s earnings recovery in the second half of 2022.

“In aggregate, overseas operations contribute 43%/28% of CD’s revenue/core operating profit in H1 2022. Assuming 10%/15% depreciation of A$/£ against S$, we see a potential 3.6% hit on ComfortDelGro’s operating profit. Taking into account forex headwinds and potential near-term margin pressure from rising inflation, we lower our FY2022-2024F EPS by 2%-7.6%. We still forecast a sequential core net profit improvement in H2 2022F to $94m,” Ong Khang Chuen, an analyst at CGS-CIMB said.