ComfortDelGro - OCBC Investment 2024-03-04: Driving Slow

• ComfortDelGro (SGX:C52) reported a sequential improvement in its 4Q23 financial performance, with revenue, operating profit and PATMI up 2.5%, 5.4%, 4.4% q-o-q and 4.5%, 8.5%, 104% y-o-y to S$1b, S$79.5m, S$52.1m respectively.

Quarterly recovery momentum was positive throughout FY23

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• ComfortDelGro’s FY23 revenue and PATMI came in at 99.9% and 102.9% of our full year forecasts, respectively, meeting our expectations.
• ComfortDelGro has announced a final dividend of 3.76 Singapore cents per share. Including an interim dividend of 2.90 Singapore cents, ComfortDelGro's dividends for the year is 6.66 Singapore cents, which represents a yield of ~5% based on the last close price of S$1.35 as at 29 Feb 2024.

Improvement was mainly underpinned by the taxi & private hire segment

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• Meanwhile, the public transport segment posted a 2.5% increase in revenue to S$3b due to improved rail ridership and fare increases in Singapore, but operating margins were a tad lower at 4% (FY22: 4.2%) due to lower margins from five bus packages in Singapore and renewed contracts in Australia. Hence, operating profit was down 26.2% to S$120.4m.
• The other private transport business narrowed its operating loss from S$5.4m in FY22 to S$1.6m in FY23 despite lower revenue from lower volumes, while the inspection & testing services and other segments posted fairly stable performance y-o-y.

Still awaiting a more meaningful catalyst

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Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-03-04 SGinvestors.io

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