17-09-2017, 04:19 PM
Hi Ray,
The above profits are not for FY 17, but what I think will be the true FY profits for each division over the next 3-5 years.
Why have I guided for a 50mil Profit for the taxi Division? This is because prior to 2017, Comfort was renting its taxis out in the region of 109, however, Uber/Grab's competition forced comfort to reduce rentals this year. This happened in Feb/Mar of this year.
On the private rental market, car rentals are going for much lower at 40-65+ after subsidies. If you compare CDG's 1HFY17 revenue vs 1HFY16 revenue, there was only a slight decline of 8% (55mil) and along with it a 13 mil decline in profits.
Hence if Comfort is really forced to reduce rentals to say in the region of 70 per day, we can expect a fall in revenue from 673.9mil (109+ rental rate) to maybe 432mil (70 range). Such a fall means on a half year basis, profit falls from 85.1mil to 25-30 mil. I have guided for 25 mil.
From CNA's updates on Grab's woo on Comfort drivers, it can be seen that some Comfort cabbies are still stuck on the old rental rates of $110 and this could be due to them having signed the 24-36 month contract with Comfort to rent their taxis (similar to our handphone plans)
http://www.channelnewsasia.com/news/sing...ro-9184980
The above profits are not for FY 17, but what I think will be the true FY profits for each division over the next 3-5 years.
Why have I guided for a 50mil Profit for the taxi Division? This is because prior to 2017, Comfort was renting its taxis out in the region of 109, however, Uber/Grab's competition forced comfort to reduce rentals this year. This happened in Feb/Mar of this year.
On the private rental market, car rentals are going for much lower at 40-65+ after subsidies. If you compare CDG's 1HFY17 revenue vs 1HFY16 revenue, there was only a slight decline of 8% (55mil) and along with it a 13 mil decline in profits.
Hence if Comfort is really forced to reduce rentals to say in the region of 70 per day, we can expect a fall in revenue from 673.9mil (109+ rental rate) to maybe 432mil (70 range). Such a fall means on a half year basis, profit falls from 85.1mil to 25-30 mil. I have guided for 25 mil.
From CNA's updates on Grab's woo on Comfort drivers, it can be seen that some Comfort cabbies are still stuck on the old rental rates of $110 and this could be due to them having signed the 24-36 month contract with Comfort to rent their taxis (similar to our handphone plans)
http://www.channelnewsasia.com/news/sing...ro-9184980