- ComfortDelGro (SGX:C52)'s 3Q23 normalised PATMI jumped 48% y-o-y to S$48mil and was within our expectations. Revenue was softer than expected. 9M23 revenue and PATMI were 73% and 78% of our FY23e forecast.
- - Read this at SGinvestors.io -
- Our BUY recommendation and DCF target price of S$1.57 for ComfortDelGro is unchanged.
The Positive
UK operations turnaround.
- A major part of ComfortDelGro's earnings growth in 3Q23 was the turnaround in UK operations. From an operating loss of S$2mil, UK swung to a S$6mil profit. Around 70% of the routes have been re-indexed.
- - Read this at SGinvestors.io -
The Negative
Rail profitability is still weak.
- We believe profitability in Singapore rail remains weak despite the jump in passenger traffic. ComfortDelGro's rail operations are burdened by the higher electricity and a lagged re-pricing of fares. The next round of higher fares will be in December this year.
Outlook
- Read more at SGinvestors.io.
