ComfortDelGro's Downtown Line lost S$6.1m

More losses as operations ramp up.

According to DBS, 4Q12 net profit increased by 2% y-o-y to S$57.6m, ending FY12 at a record profit of S$248.9m (+6% y-o-y), within our forecasts (S$248m).

4Q revenue rose by 2%, driven by all business segments, except bus station and automotive engineering in China. EBIT margins dipped marginally to 10.6% (4Q11: 10.8%) as operating expenses rose by 2% mainly from higher staff costs (+6% to S$284.3m) and contract services (+12% to S$121.4m), offset partially by lower materials and consumables (-11% to S$79.8m) and fuel and electricity costs (-13% to S$64.3m).

Here's more from DBS:

Hedging energy/fuel as in 2012. Management indicated that they have hedged 60% and 40% of its fuel requirements in Singapore and the UK, respectively.

This should continue to provide visibility and stability to its earnings in 2013, as in 2012.

DTL incurred a loss of S$6.1m. Staff recruitment is expected to continue towards the operation of Downtown MRT Stage 1 (DTL1) in 2013 with about 400 staff, up from 210 currently.

While we expect losses to continue as operations ramp up, this should not pose a huge impact to the group given its larger size and geographical/ business
diversification, in our view.

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