CDG declares interim dividend of 2.85 cents and special dividend of 1.41 cents amid 30.4% 1HFY2022 earnings growth

The interim dividend will be paid on Aug 29.

ComfortDelGro (CDG) has reported earnings of $118.7 million for the 1HFY2022 ended June, 30.4% higher y-o-y.

The earnings growth was largely due to a one-off exceptional gain of $30.5 million from the disposal of the Alperton property in London. Excluding the exceptional gain, net profit stood at $88.2 million, 3.1% lower y-o-y.

During the period, revenue increased by 6.7% y-o-y to $1.86 billion due to the relaxed Covid-19 measures in most of CDG’s markets except China.

The higher revenue was also due to improved revenue from the group’s public transport services business, automotive engineering services business, inspection and testing business, car rental and leasing business, and offset by the lower revenues from its taxi business, driving centre business and bus station business.

Total operating costs increased by 5.7% y-o-y to $1.68 billion due to a surge in fuel and electricity costs and materials and consumables costs.

Operating profit for the half-year period rose by 30.5% y-o-y to $175.6 million.

In the 1HFY2022, the group’s overseas businesses accounted for 42.6% of total revenue and 47.3% of total operating profit. In particular, its Australian operations registered a strong performance, accounting for 45.5% and 43.3% of total overseas revenue and operating profit respectively.

Earnings per share (EPS) for the 1HFY2022 stood at 5.48 cents on a fully diluted basis.

As at end-June, cash and cash equivalents stood at $970.5 million.

Due to its healthy net cash position with stable forecasted cashflows, the board says it will return the full net gain from the sale to its shareholders in the form of a special dividend – the first time since 2007 that such a dividend has been declared.

For the 1HFY2022, CDG has declared an interim dividend of 2.85 cents and a special dividend of 1.41 cents. This is up from the interim dividend of 2.10 cents in the 1HFY2021.

The interim dividend will be paid on Aug 29.

“The group is in a fortunate position to have a strong cash flow and be in a net cash position. As such, we do not have any problem funding our dividend payouts internally,” says Lim Jit Poh, CDG’s chairman.

“With the exceptional gain from the sale of the Alperton property in London, we have decided to pass on the net gain from that sale to our shareholders. This is something we will continue to do going forward when we make extraordinary gains and have no urgent need of the proceeds,” he adds.

“As most of the world emerges from the Covid-19 pandemic, demand for the group’s services has continued to grow, save for China which maintains a “zero-Covid” policy. Our public transport and taxi businesses have, in particular, benefitted from the increased movement of people and uptick in activity levels. But even as pressures from the two-year pandemic subside, new challenges have emerged amidst growing geo-political tensions,” says Yang Ban Seng, CDG’s managing director.

“We continue to keep a close eye on unfolding events around the world which will have an impact on global economic recovery,” he adds.

Looking ahead, high inflation rates remain an area of concern for the group as it continues to put its margins under increasing pressure. In its statement on Aug 12, it says it will continue to monitor increasing interest rates while managing borrowings.

Shares in CDG closed flat at $1.46 on Aug 12.

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