ComfortDelGro’s public transport unit earnings hit by UK business: RHB

Its EBIT went down by 38% in the third quarter (Q3) of 2022.

After posting a higher profit after taxation and minority interests, ComfortDelGro’s public transport segment did not perform too well due to its UK business, analyst, RHB, said.

In a brokerage report, RHB cited that the public transport unit booked “weak” earnings, with its EBIT declining by 38% in Q3 2022.

“Adjusting for numbers reported by SBS Transit, we assess that CD’s overseas public transport business reported a much sharper YoY decline in recurring EBIT,” said RHB.

RHB said the ComfortDelGro’s UK business has higher operating costs and there was also a mismatch between timing and correlation of contract costs, which is expected to continue in the next quarter.

ComfortDelGro’s taxi business showed improvements due to increased revenue from “lower pandemic-related rental discounts, higher call volumes, and newly introduced commissions.”

“ComfortDelGro will extend the rental discount for the rest of 2022 and has increased the commission rate for call bookings to 5% from 4%, which will help partially offset the rental discounts,” RHB said.