Three critical risks for ComfortDelGro amidst expected H2 improved earnings
Overseas operations and a rise in ridership will drive the transport business.
Top Singapore transport firm, ComfortDelGro, will see improved earnings in the second half of 2023 after lower net profit in the first quarter of the year, according to an RHB brokerage report.
Some key positives include its overseas operations amidst “indexation of higher operating costs in the UK.”
Ridership will also be enhanced in Singapore and a taxi rental discount will be reduced from 15% to 10% starting 1 April 2023.
But ComfortDelGro will still face challenges such as “losing the Bukit Merah and Jurong West bus packages or retaining them at lower-than-estimated service fees, higher-than-estimated operating costs, and weak taxi earnings from a failure to gradually phase out rental rebates.”
In its previous financial statement, ComfortDelGro said it was hit by inflationary cost pressures on public transport services.