ComfortDelGro (SGX:C52) was awarded three bus contracts in Australia, with a ~AUD1.6bn contract value to be spread over a 10-year term commencing in Jul 2025. The win allows ComfortDelGro to not only retain its existing contracts but also add new services in its Victoria Public Bus business.
- Read this at SGinvestors.io -
New contract win in Australia.
ComfortDelGro has been given contracts to operate bus services in three of the five Melbourne metropolitan zones in Victoria, Australia. The three franchises are worth around AUD1.6bn or S$1.4bn. The contract will last 10 years, beginning in Jul 2025.
- Read this at SGinvestors.io -
ComfortDelGro stated that the buses and depots are funded as part of the contracts, and it will switch to zero-emission operations by the conclusion of the contract term. The contracts will include 250 public bus and school routes, served by nearly 360 buses.
While we view the contract win as positive for ComfortDelGro, it may not have a significant impact on earnings. This is largely because ComfortDelGro had earlier indicated that its Australian public transport business is seeing increased competitive pressure, which could translate into lower margins.
In its 2Q24 results briefing, ComfortDelGro noted that it is facing driver shortages as well.
One-off earnings impact in 3Q25.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
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