<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Profits skid on high oil prices
</TR><!-- headline one : end --><TR>Singapore bus and taxi operations hardest hit </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Christopher Tan, Senior Correspondent
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High fuel costs have eroded earnings from Comfort taxis and SBS Transit buses. -- ST FILE PHOTO: LIM WUI LIANG BH FILE PHOTO: JOHARI RAHMAT
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TRANSPORT giant ComfortDelGro reported a rare dip in earnings for the second quarter, dragged down by soaring oil prices and heftier rebates to retain cabbies in Singapore's heated taxi market.
Despite a 5.8 per cent rise in revenue to $790.1 million for the three months ended June 30, net profits fell 2.9 per cent to $56.8 million. Half-year profit was 6.1 per cent down at $107 million.
The figures include an exceptional gain of $26.5 million, which arose when ComfortDelGro upped its stake in Cabcharge Australia from 5 per cent to 7.46 per cent in June.
Fuel and power costs shot up by 60.2 per cent in the quarter to $82.5 million while materials and consumables - mainly the diesel it buys to sell to cabbies - was up 57.4 per cent to $92.4 million. These were the two biggest cost increases incurred.
Earnings per share for the first half were 5.13 cents, down from 5.49 cents, while net asset value per share as at June 30 was 74.05 cents, down from 71.11 cents as at Dec 31.
Separately, ComfortDelGro incurred an $11.3 million loss in diesel sales in the second quarter, as it often had to sell fuel below cost to help drivers manage soaring pump prices.
The competition for drivers has been heating up since the market liberalised in 2003. From just ComfortDelGro and SMRT, there are now six operators.
High fuel prices have also eroded the group's other core division, buses. Its local bus operations, run by 75 per cent owned SBS Transit, posted its first operating loss since quarterly reporting began in 2003.
But together with other activities such as rail, advertising and rental of retail space in MRT stations, SBS Transit posted a net profit of $6.4 million, down 56 per cent from the same quarter last year. First-half earnings fell 31.3 per cent to $21.7 million.
SBS Transit's rail business continued to grow. Daily ridership is now close to 300,000 and rail operating profit rose to $2.1 million, from $1.2 million last year.
ComfortDelGro's overseas businesses fared well as the group is shielded from rising fuel prices in markets such as Britain, China and Australia. The respective states bear the brunt of lofty oil prices.
Operating profit from abroad accounted for a record 60 per cent of group operating profit, with the overseas bus operations accounting for an unprecedented 89 per cent of group bus profits.
In Singapore, analysts said the group was caught off guard by fast-rising oil prices in recent months.
ComfortDelGro chief executive Kua Hong Pak told The Straits Times: 'Fuel prices have been trading at record levels until recently. Now that prices have softened considerably, we are looking at hedging our needs.'
Despite the lower profits, the group is declaring an interim dividend of 2.6 cents, or 50.7 per cent of distributable profit, compared with a payout of 3.35 cents in normal dividend in first-half 2007. The group has since used up all its Section 44 tax credits in dividend payments.
SBS Transit is paying three cents in interim dividend, down from six cents previously.
Vicom, another ComfortDelGro subsidiary, is paying five cents in interim dividend, up from three cents previously. The vehicle inspection company posted a 1.8 per cent drop in quarterly net earnings to $4.5 million, but a 6.5 per cent rise in half-year profit to $8.6 million.
Mr Kua said: 'The operating environment has proven to be difficult with the global economic slowdown, rising inflation and high oil prices. This is not expected to ease up soon.
'We will however continue to remain vigilant and will act on opportunities for growth when they present themselves.' [email protected]
</TR><!-- headline one : end --><TR>Singapore bus and taxi operations hardest hit </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Christopher Tan, Senior Correspondent
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
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High fuel costs have eroded earnings from Comfort taxis and SBS Transit buses. -- ST FILE PHOTO: LIM WUI LIANG BH FILE PHOTO: JOHARI RAHMAT
</TD></TR><TR><TD>
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->TRANSPORT giant ComfortDelGro reported a rare dip in earnings for the second quarter, dragged down by soaring oil prices and heftier rebates to retain cabbies in Singapore's heated taxi market.
Despite a 5.8 per cent rise in revenue to $790.1 million for the three months ended June 30, net profits fell 2.9 per cent to $56.8 million. Half-year profit was 6.1 per cent down at $107 million.
The figures include an exceptional gain of $26.5 million, which arose when ComfortDelGro upped its stake in Cabcharge Australia from 5 per cent to 7.46 per cent in June.
Fuel and power costs shot up by 60.2 per cent in the quarter to $82.5 million while materials and consumables - mainly the diesel it buys to sell to cabbies - was up 57.4 per cent to $92.4 million. These were the two biggest cost increases incurred.
Earnings per share for the first half were 5.13 cents, down from 5.49 cents, while net asset value per share as at June 30 was 74.05 cents, down from 71.11 cents as at Dec 31.
Separately, ComfortDelGro incurred an $11.3 million loss in diesel sales in the second quarter, as it often had to sell fuel below cost to help drivers manage soaring pump prices.
The competition for drivers has been heating up since the market liberalised in 2003. From just ComfortDelGro and SMRT, there are now six operators.
High fuel prices have also eroded the group's other core division, buses. Its local bus operations, run by 75 per cent owned SBS Transit, posted its first operating loss since quarterly reporting began in 2003.
But together with other activities such as rail, advertising and rental of retail space in MRT stations, SBS Transit posted a net profit of $6.4 million, down 56 per cent from the same quarter last year. First-half earnings fell 31.3 per cent to $21.7 million.
SBS Transit's rail business continued to grow. Daily ridership is now close to 300,000 and rail operating profit rose to $2.1 million, from $1.2 million last year.
ComfortDelGro's overseas businesses fared well as the group is shielded from rising fuel prices in markets such as Britain, China and Australia. The respective states bear the brunt of lofty oil prices.
Operating profit from abroad accounted for a record 60 per cent of group operating profit, with the overseas bus operations accounting for an unprecedented 89 per cent of group bus profits.
In Singapore, analysts said the group was caught off guard by fast-rising oil prices in recent months.
ComfortDelGro chief executive Kua Hong Pak told The Straits Times: 'Fuel prices have been trading at record levels until recently. Now that prices have softened considerably, we are looking at hedging our needs.'
Despite the lower profits, the group is declaring an interim dividend of 2.6 cents, or 50.7 per cent of distributable profit, compared with a payout of 3.35 cents in normal dividend in first-half 2007. The group has since used up all its Section 44 tax credits in dividend payments.
SBS Transit is paying three cents in interim dividend, down from six cents previously.
Vicom, another ComfortDelGro subsidiary, is paying five cents in interim dividend, up from three cents previously. The vehicle inspection company posted a 1.8 per cent drop in quarterly net earnings to $4.5 million, but a 6.5 per cent rise in half-year profit to $8.6 million.
Mr Kua said: 'The operating environment has proven to be difficult with the global economic slowdown, rising inflation and high oil prices. This is not expected to ease up soon.
'We will however continue to remain vigilant and will act on opportunities for growth when they present themselves.' [email protected]
