Revenue was up 6.7% year-on-year (yoy) to S$1.86 billion during H1 2022 while PATAMI increased 27.7% yoy to S$118.7 million.
This was despite the increase in its operating costs (by 9.2%) on the back of higher fuel and electricity costs for its public transport segment.
The reopening of the economy has benefitted ComfortDelGro. Furthermore, as economic activity in countries that ComfortDelGro operates in – such as the UK, Ireland, Australia, New Zealand and Malaysia – continues to pick up, this will boost the company’s earnings.
2. High dividend payout for investors
ComfortDelGro’s management has maintained its commitment to its dividend policy that aims to pay out at least 50% of its PATAMI.
At its current share price of S$1.38, the company has a trailing dividend yield of 3.6%.
Given the expected recovery in earnings, I believe that this bodes well for investors as the company’s dividend should rise going forward.
It is also exciting to see how ComfortDelGro is trying to create new earnings growth drivers.
The four new areas of growth are: rail, electrification, logistics and non-emergency medical transportation.
Here are just a few of the recent developments that we have seen at the company:
ComfortDelGro entered into the New Zealand market to operate the Auckland Rail Network
The company was also shortlisted for the Western Sydney Airport rail project with its Australian partners
At the beginning of this year, ComfortDelGro acquired a 90% stake in Ming Chuan Transportation Pte Ltd in order to strengthen its medical transport business segment
Focus on company’s business fundamentals
I think that investors need to look beyond short-term uncertainties in the market.
It’s true the removal from the STI will result in some fund outflows from passive investors, such as the Exchange-Traded Funds (ETFs) that track indices.
However, I think the near-term price pressure on ComfortDelGro offers buying opportunities for investors as the firm’s business fundamentals remain solid.
In fact, ComfortDelGro’s earnings recovery is expected to continue in the coming quarters. This will be supported by improved monetisation of its Singapore taxi business, higher rail ridership, and increased charter activities as tourism rebounds.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.