ComfortDelGro's rail operation hurt by Downtown line start-up costs

Rail operating profit would have ticked up by 0.87%.

According to OSK, Singapore rail and bus operation remains under pressure. Despite the fact that average daily rail and bus ridership continued to grow, rising 8.1% and 3.9% respectively, ComfortDelGro generated minimum profits from these business segments.

The rail operation was temporarily weighed down by start-up costs at its Downtown line, while the bus operation’s problems are long-standing. While a fare hike is in sight, OSK believes that the potential positive impact would be minor as it expects the increase to be minimal.

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Rail profit offset by DTL start-up costs. Average daily North-East Line (NEL) and  LRT ridership rose 8.1% to 573k in 3Q13 from 530k in 3Q12.

However, excluding advertising and rental expenses, the company’s 3Q13 rail recorded operating losses amounting to SGD2.6m vs an operating profit of SGD0.4m in 3Q12 due to start-up costs at its Downtown Line (DTL).

Excluding these costs, CD’s rail operating profit would have ticked up by 0.87% to SGD2.5m in 2Q13, as the higher rail fare revenue of SGD37.9m (+8.3% y-o-y) was offset by higher repairs and maintenance costs.