ComfortDelGro - CGS-CIMB Research 2023-11-14: Further Earnings Recovery Taking Shape In 3Q23

• ComfortDelGro (SGX:C52)’s PATMI grew to S$50m (+9% q-o-q, +54% y-o-y) in 3Q23, roughly in line with our preview of S$52m. The sequential PATMI improvement was driven by
  1. strong margin recovery in its UK public bus business,
  2. - Read this at SGinvestors.io -
  3. lower taxi rental discounts in China with normalisation of activities post-COVID reopening.
• 9M23 PATMI made up 69%/72% of our/Bloomberg consensus’ FY23F – we expect further earnings recovery in 4Q23F.

UK operations returned to profitability in 3Q23

• ComfortDelGro’s UK operations returned to positive EBIT in 3Q23 at S$6.1m (1H23: -S$5.8m, FY22: -S$10.4m).
• Recall that ComfortDelGro granted its London Metroline public bus drivers an 11% pay increase, with a 10% increase in back pay in Dec 2022, to avert strike action. With annual indexation of service fees on route anniversary (~70% completed in 9M23), the higher costs absorbed by ComfortDelGro are being gradually passed on to the government.
• - Read this at SGinvestors.io -

Singapore operations stable in 3Q23

• Read more at SGinvestors.io.

ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-14 SGinvestors.io

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