Why SMRT struggles with energy cost inflation and ComfortDelGro does not
CD has hedged 90% of its fuel needs and 60% of its electricity needs for 2H12, says CIMB.
Here's more from CIMB:
With the exception of driving centres, all segments reported stronger revenue in 2Q12, lifting the group’s topline to $885m (+5% yoy). Net profit grew 9% to S$65m. This quarter marked the reversal of energy costs, which fell 0.8%, providing long-awaited margin relief.
This came in contrast to peer SMRT, which continued to struggle with energy cost inflation during the quarter, suggesting more astute fuel hedging by CD. The group has hedged 90% of its fuel needs and 60% of its electricity needs for its 2H12 Singapore operations at “good prices”, implying waning margin pressure from energy costs.