Are Ride-Hailing Companies Still a Threat to ComfortDelGro?
- Original Post from The Motley Fool Sg

ComfortDelGro Corporation Ltd (SGX: C52), or Comfort for short, is a land transportation behemoth with business interests in bus, rail, and taxis. Aside from Singapore, the group has a presence in six other countries – China, the UK, Australia, Malaysia, Ireland and Vietnam.


Investors can recall the troubles associated with Comfort’s taxi fleet when Uber Technologies Inc (NYSE: UBER) started to operate and expand its fleet aggressively in Singapore back in 2013. In that same year, Grab Singapore (a home-grown ride hailing company) also started its operations and expanded aggressively with the assistance from venture capitalists.


The price wars got so bad from 2013 through to 2018 that Comfort’s taxi fleet shrank to its lowest level in a decade, to just 13,244 (down 22% from its December 2015 fleet size). In March 2018, Uber was sent packing from Singapore when Grab acquired its Southeast Asian operations, just months after Comfort had signed a strategic collaboration deal with Uber.


So the key issue is one many Singaporean companies will have to grapple with – potential disruption. More specifically for Comfort though, are ride-hailing companies such as Grab and Gojek (a new Indonesian ride-hailing company which entered Singapore in late-2018) still a major threat to it?


Comfort adding 200 taxis to its fleet


Comfort announced recently that it was adding 200 new taxis to its fleet, in what was the first addition to the fleet in 18 months. According to the group, this was due to more people switching from driving private hire cars to driving taxis instead, as driving taxis was more “stable”. The last time Comfort placed an order for taxis was in December 2016.


Dynamic fare implementation


Barely two weeks ago, Comfort declared its intention to implement dynamic pricing, along with a plan to open up its booking app to Grab and Gojek drivers. Though reasons remain unclear at this point, this move may be an attempt to stem the exodus of taxi drivers into the private hire market. The problem is that this move may backfire as it will start to blur the lines between taxis and private hire cars, with commuters lumping them together as one and the same.


Grab and Gojek attempt to become “super-apps”


Grab and Gojek are also not sitting still, with both companies adding to their respective fleets too. However, these companies also have a larger purpose in mind, which is to become a “super-app” for users to access all kinds of services, similar to the concept of an “app within an app” developed by Chinese companies such as Tencent Holdings Ltd (HKSE: 700). This goal makes them spread their resources out to different functions rather than simply ride-hailing alone and could provide some respite to Comfort.


Stabilising ride


The above evidence points to a stabilising situation for Comfort, as they are beginning to order new taxis again, possibly signalling increased demand for taxis in the near future. However, the planned implementation of dynamic pricing could work against Comfort if it cannot differentiate itself from the ride-hailing companies. This is something investors need to watch closely for developments.


In addition, Grab and Gojek are no pushovers either as both companies, though unprofitable, have massive funding backing them. So even if it looks as though the battle may be over for now, another war could be about to commence.


There are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Royston Yang does not own shares in any of the companies mentioned. The Motley Fool Singapore has recommended shares of Tencent Holdings Ltd.


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ComfortDelGro’s Latest Earnings: Strong Start to the Year
- Original Post from The Motley Fool Sg

ComfortDelGro Corporation Ltd (SGX: C52) is a Singapore-based land transportation conglomerate with business interests in the bus, taxi and rail services. Apart from Singapore, it has a presence in six other countries, namely, China, the UK, Australia, Malaysia, Ireland, and Vietnam.


ComfortDelGro announced its financial results for the first quarter ending 31 March 2019, yesterday. Let’s have a quick look to see how it did.


Financial highlights


Here are some of the key financial highlights from the latest full-year results:


1) Revenue grew 7.8% year-on-year to S$947.3 million. The increase in revenue was on the back of strong contributions from new acquisitions which accounted for close to 80% of the increase in revenue.


2) Total operating costs followed suit increased by 7.3% to S$839.9 million. The increase in operating cost was due to staff costs associated with the new acquisitions.


3) As a result, operating profit rose by 12.2% to S$107.4 million.


4) Profit attributable to shareholders saw a 6.2% rise, from S$66.3 million to S$70.4 million.


5) Consequently, earnings per share moved from 3.06 cents to 3.25 cents, up 6.2%.


6) As of 31 December 2018, ComfortDelGro’s balance sheet had S$586.1 million in cash and bank balances, and S$569.9 million in total debt. This translates to a net cash position of S$16.2 million. This is lower year-on-year when compared to 2017 when ComfortDelGro reported a net cash position of S$273.9 million.


7) Operating cash flow, improved by 49.1%, from S$64.1 million a year ago to S$95.6 million. Capital expenditure, on the other hand, increased from S$37.7 million to S$95.2 million. This resulted in ComfortDelGro’s free cash flow dropping sharply by 98.5%, from S$26.4 million S$0.4 million.


Outlook


ComfortDelGro Managing Director/Group CEO, Mr. Yang Ban Seng, commented,


“The robust first quarter’s results show growth from the new acquisitions as well as existing businesses. The acquisitions we made in the last year have started to reap returns and we expect that they will continue to do so. We will continue to grow our core businesses, look at investment opportunities and explore new areas for growth, particularly in those that leverage technology and strengthen our core expertise.”


ComfortDelGro’s share price ended trading on Tuesday at S$2.57, resulting in a price-to-earnings ratio of 18.4 and a dividend yield of 4.1%.


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Motley Fool writer Esjay contributed to this article. Esjay does not own shares in Comfortdelgro.


The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Tim Phillips doesn’t own shares in any companies mentioned.


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ComfortDelGro’s Latest Earnings: Uninspiring Profits
- Original Post from The Motley Fool Sg

ComfortDelGro Corporation Ltd (SGX: C52) is a land-transportation conglomerate with business interests in bus, taxi and rail services.


Apart from Singapore,it has a presence in six other countries, namely, China, United Kingdom, Australia, Malaysia, Ireland, and Vietnam.


ComfortDelGro announced its financial results for the full year ended 31 December 2018, yesterday.


Here are some of the key financial highlights from the latest full-year results:


1) Revenue grew 6.4% year-on-year to S$3.80 billion.


2) Total operating costs followed suit –increased by 6.3% to S$3.37 billion.


3) As a result, operating profit rose slightly by 2.8% to S$358.8 million.


4) Profit attributable to shareholders saw a 0.6% rise, from S$301.5 million to S$303.3 million.


5) Consequently, earnings per share moved from 13.95 cents to 14.01 cents, up 0.4%.


6) As of 31 December 2018, Comfortdelgo’s balance sheet had S$586.1 million in cash and bank balances, and S$569.9 million in total debt. This translates to a net cash position of S$16.2 million. This is lower year on year, when Comfortdelgro reported a net cash position of S$273.9 million.


7) Operating cash flow, improved by 14.9%, from S$581.9 million a year ago to S$668.8 million. Net capital expenditure, on the other hand, decreased from S$283.6 million to S$226.1 million. This resulted in Comfortdelgro’s free cash flow surging by 48.4%, from S$298.3 million to S$442.7 million.


8) A final dividend of 6.15 cents was declared bringing the full year dividend to 10.5 cents, increasing by 0.96% year on year.


The increased top-line of 6.4% to S$3.8 billion for 2018 was due to higher revenue from new acquisitions and an increase in revenue from Public Transport Services, Inspection & Testing services, and Driving centre businesses. This was offset by weakness seen in the Taxi Business and the Automotive Engineering Services Business.


Operating costs increase in line with revenue due to higher staff cost, higher fuel, and electricity cost and higher repair and maintenance requirements.


Outlook


Going forward, Comfortdelgro commented that revenue from its Public Transport services in Singapore is expected to grow together with its Australian Bus Business. The Taxi business is expected to be maintained amidst the keener competitive environment. Other business segmented expected to be maintained are its Automotive engineering services, Inspection & Testing services, and Driving centre businesses. Lastly, its Car rental and Leasing business are expected to be lower.


Comfortdelgro also commented:


“The operating environment is expected to remain challenging. The Group will continue to manage costs prudently and seek growth and acquisition opportunities”


Comfortdelgro’s share price ended the day on Wednesday at S$2.38, resulting in a price-to-earnings ratio of 16.9 and a dividend yield of 4.4%.


Click here nowfor yourFREEsubscription toTake StockSingapore, The Motley Fool’s free investing newsletter. Written byDavid Kuo,Take Stock Singaporetells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


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The Motley Fool Singapore writer, Esjay,contributed towards this article. Esjay does not own shares in ComfortDelGro.


The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.


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2 Companies to Watch This Week (StarHub Ltd and ComfortDelGro Corporation Ltd)
- Original Post from The Motley Fool Sg

This week, a host of companies will be giving updates on their results for the final quarter of 2018. Two companies in particular are in the spotlight:StarHub Ltd (SGX: CC3) and ComfortDelGro Corporation Ltd (SGX: C52). Here’s what investors should be looking out for when they release their results later this week.


Pay TV on the decline


StarHub Ltd is Singapore’s second largest telecommunications company. Its business can be divided into five main business segments: mobile, pay TV, broadband, enterprise fixed, and equipment sales.


In the past year, Starhub’s share price has fallen nearly 40% from its high of S$2.99 in 2018 due to disruptive competition from online streaming and a fourth telco company making its way into Singapore.


The company has suffered from lower revenue and profit from its mobile services and pay TV segments in the first nine months of 2018.


Despite a higher customer base recorded in its mobile services segment, there was an 8.3% decline in average revenue per user in the third quarter of 2018, which resulted in a 4.2% decrease in revenue from its mobile services.


Its pay TV segment has suffered due to competition from online streaming services such as Netflix. As a result, its customer base in the pay TV segment was down by 44,000, and average revenue per user decreased by $4 to S$47.


The lower average revenue per user has squeezed margins in the group, and so far this year, net profit has declined by close to 17%.



Source: StarHub Ltd 2018 Q3 Investor Presentation


In the upcoming earnings update, investors should watch for updates on the pay TV and mobile services segments. Is the company planning for strategic changes to tackle the decline, and what are its expectations for 2019? Hopefully, these answers will give investors a clearer idea of what’s in store in the future.


Bus and train services on the up


Like Starhub Ltd, ComfortDelGro is another company that has been facing disruptions to one of its core business segments. Ride-hailing apps such as Grab and Uber (when it was still in operation) have caused a decline in the ComfortDelGro taxi business. In Singapore, ComfortDelGro has been forced to decrease the size of its fleet, which has resulted in lower revenue contributions from the taxi business.


That said, ComfortDelGro also has other important business contributors, such as its public transports services business, which contributed 71% of the company’s revenue in the third quarter of 2018. Revenue from this segment grew by 15.1% in that quarter.In addition, ComfortDelGro has looked to expand its business overseas through the acquisition of bus lines in Australia and Wales.


In its last reporting quarter, the land transport giant said that it expects growth in its public transport services in Singapore and Australia due to the new bus lines. Its other segments are expected to be stable.


Meanwhile, there are 28 surprising and important things we think every Singaporean investor should know—and we’ve laid them all out in The Motley Fool Singapore’s new e-book. Packed with information and insights, we believe this book will help you be a better, smarter investor. You can download the full e-book FREE of charge—simply click here now to claim your copy.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia doesn't own shares in any companies mentioned.


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The Week Ahead: Singtel, SIA and ComfortDelGro
- Original Post from The Motley Fool Sg

It’s a big week for Singapore’s transportation sector with numbers from a port operator, an airport services outfit and a cab firm.


Hutchison Port Holdings (SGX: NS8U) posted a slump in third-quarter profits in October. Revenue fell nearly 7% because of weaker within Asia. The Hong Kong-based port operator said it will continue to focus on improving costs given the soft global trade outlook.


Airport services company, SATS (SGX: S58), reported a 9% drop in second-quarter earnings because of the absence of a one-time gain a year ago. But SATS said revenues was 4.2% higher, with gateway services up 6.3% and food solutions up 2.5%.


ComfortDelGro (SGX:C52) said third-quarter profits were down 2%. But revenues improved 8.5% with increased revenues from its existing business and contributions from new acquisitions.


Singapore’s biggest telecom operator, Singapore Telecommunications (SGX: Z74), said profits sunk in the second-quarter because of negative currency movements and lower contributions from Airtel and Telkomsel.


Singapore Airlines (SGX: C6L) was adversely affected by higher fuel costs in the second quarter. Profits sank 81%, even though sales rose 5.6%.


On the economic front, US headline inflation could have moderated from 1.9% in December to 1.6% in January. In December, my monthly consumer prices fell for the first time in nine months because of a slump in petrol prices.


China’s inflation rate could have edged up to 2% in January, after falling back to a six-month Low in December. The slowdown in inflation was due to a drop in non-food prices.


Meanwhile, the country’s balance of trade with the rest of the world could have narrowed to $35 billion on lower a drop in exports and an even bigger fall in imports.


Japan is expected to say that its economy grew at an annualised rate of 1.4% in the fourth quarter of 2018. That would be a sharp reversal of a 2.5% contraction in the previous quarter.


Malaysia will also report GDP numbers for the final three months of 2018. The economy could have expanded from 4.4% in the previous quarter to 4.6%.


And finally, Singapore will report retail sales for December. In November, they fell 3% on a slump in sales of computer and telecom equipment. It would be unusual not to see an uplift in a festivity-driven December number.


The Motley Fool’s purpose is to help the world invest, better. Click here nowfor your FREE subscription to Take Stock - Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock - Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuoowns shares in SATS.



$SingTel(Z74.SI) $SIA(C6L.SI) $ComfortDelGro(C52.SI)

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Singapore’s Top 10 Dividend Shares Among the World’s Best
- Original Post from The Motley Fool Sg

There are 26 Singapore-listed shares in the FTSE All-World High Dividend Yield Index. This global dividend yield index contains 1,389 globally-listed shares that have a higher-than-average dividend yield. The index excludes real estate investment trusts (REITs) and stocks that are forecast to pay no dividend over the next 12 months.


Here, let’s look at the next five Singapore-listed companies – part of the FTSE All-World High Dividend Yield Index – that have the highest dividend yields (yield data as of 18 January 2019). For the first five, you can head here.


Cream of the crop


Coming in sixth is Frasers Property Ltd (SGX: TQ5) with a dividend yield of 4.9%. The property developer has maintained a dividend per share of 8.6 cents from FY2014 (financial year ended 30 September 2014) to FY2018. The company has a dividend policy of paying up to 75% of its yearly net profit after tax as dividend.


ComfortDelGro Corporation Limited (SGX: C52) is next in line with 4.9% in dividend yield. For 2017, the land transport giant upped its dividend payout to 10.4 cents per share from 10.3 cents per share in the prior year. Will the company increase its dividend again for 2018? We will know for sure when ComfortDelGro announces its full-year financial results in February.


DBS Group Holdings Ltd (SGX: D05) takes the eighth position with a dividend yield of 4.8%. In 2017, DBS’ dividend per share surged 138% to S$1.43, up from S$0.60 in 2016. The 2017 dividend includes a special dividend per share of S$0.50. Without this special dividend, the dividend in 2017 would have climbed by a lesser amount of 55% year-on-year, but still commendable nonetheless. In the second quarter of 2018, DBS paid an interim dividend of S$0.60 a share, 82% higher than the interim dividend paid in 2017.


With a dividend yield of 4.7% and taking the ninth spot is SIA Engineering Company Ltd (SGX: S59). For its financial year ended 31 March 2018 (FY2017/18), the company paid a total dividend of 13 cents per share. In FY2016/17, it dished out 18 cents per share in total dividend, which includes a special dividend of 5 cents.


Singapore’s bourse operator, Singapore Exchange Limited (SGX: S68), takes the final spot. The company paid out a dividend of 30 cents per share for its fiscal year ended 30 June 2018 (FY2018). The dividend payout marked a 7% increase from the dividend payment of 28 cents per share dished out in FY2017. To know more about Singapore Exchange’s dividends, such as its dividend policy and dividend sustainability, you can take a look at the articlehere.


The Foolish takeaway


As prudent investors, we should never invest based on high dividend yields alone. The dividend yield tells us nothing about the sustainability of a firm’s dividend. What we should do instead is to look for companies that cangrow, or at least sustain, their dividends year-on-year. The above list, though, can serve as a basis for further research before you invest in any of them.


Worried about the overall state of the market? Do you know the 1 thing you should never do in the stock market? The Motley Fool Singapore’s new e-book lays out a plan to handle market crashes, details the greatest advantage you have as an investor, and looks at decades worth of market data to bring you the smartest insights on investing. You can download the full e-book FREE of charge—Simply click here now to claim your copy


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of DBS Group and Singapore Exchange. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange.


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