ComfortDelGro rides on public transport to buoy revenue growth

The Seletar bus package's contributions will kick in starting March.

ComfortDelGro Corporation Limited (CDG) is relying on its public transport services in Singapore to sustain revenue growth, as the Seletar bus package's contributions will kick in starting March, RHB Research said.

Singapore Business Review previously reported CDG's lower profits were partially offset by a 3.6% gain in public transport services to $2.39b.

According to DBS Equity Research, the public transport services segment accounted for around 60% and around 44% of group revenue and operating profit, respectively, in 2017.

Within its services in Singapore, UK, and Australia, revenue and earnings drivers are based on tenders for routes coupled with CDG meeting the service requirements set forth by the authorities.

RHB said the increase in daily ridership for Downtown Line (DTL) should moderate losses at its rail business.

Whilst the current daily DTL ridership of 450,000 is close to the estimated breakeven of 510,000, lower average fares in 2018 would mean DTL may only breakeven in 2019.

Meanwhile, DBS Equity Research expects rail operations to only be neutral due to their subdued profitability since 2013 with the operating costs of DTL.

CDG expects the revenue from its Australian bus businesses to rise as well.

RHB analyst Shekhar Jaiswal added, "Whilst revenue from the UK bus business is likely to improve in constant currency terms, it believes unfavourable forex would result in YoY decline in revenue for its UK business."

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia