ComfortDelGro sets new AGM date; to approve dividend for FY2019

Singapore’s largest taxi operator ComfortDelGro, which also has operations in the UK, Australia and China, has announced that its annual general meeting (AGM) will now take place on 22 May 2020.

The group’s share price jumped up 5.5% following the announcement. As at 15:55 SGT on Tuesday 28 April 2020, ComfortDelGro stocks are trading at S$1.55 per share.

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New AGM to be conducted via webcast

The AGM, which was originally scheduled for 24 April 2020, was deferred until further notice in a letter dated 14 April 2020.

The upcoming meeting will be conducted via a webcast at 10:00 SGT, in line with the Singapore government’s prevailing regulations to prevent the spread of Covid-19.

Shareholders who wish to vote at the AGM must submit their proxy forms in advance and appoint ‘Chairman of the Meeting’ as their proxy by 10:00 SGT on 19 May 2020.

Some of the ordinary business resolutions to be passed during this 17th AGM include the declaration of a tax-exempt one-tier final dividend of S$0.529 per ordinary share in respect to the financial year ended 31 December 2019, as well as the approval of the payment of Directors’ fees of S$948,069 (versus FY2018’s S$882,906) for FY2019.

If approved, the final dividend sum – which would be 14% lower than FY2018’s dividend payout of S$0.615 per share, will be paid on 09 June 2020.

Special business resolutions to be voted on include: authority to issue Shares under the ComfortDelGro Executive Share Award Scheme; and the renewal of the company’s share buyback mandate.

ComfortDelGro to incur an extra S$17 million in taxi rental waivers

This latest announcement follows the company’s decision last week to extend full taxi rental waiver for its hirers by another month to 01 June 2020, in line with the government’s push back of the country’s coronavirus- circuit breaker period and measures by another four weeks.

The extended rental waiver is expected to cost the Company an additional S$17 million, bringing the total relief package given to ComfortDelGro cabbies to S$116 million.

Besides helping to ease the rental load, ComfortDelGro Taxi said that it has also been working with delivery companies and restaurants to provide alternative jobs to hirers. To-date, over 680 taxi drivers have taken on alternative jobs, with an estimated 110 working as delivery personnel for food chains like KFC, Pizza Hut, Cedele and foodpanda.

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Analysts cut ComfortDelGro share price targets further

In February, the group reported that its FY2019 net profit attributable to shareholders fell by 12.6% from 2018 to S$265.1 million.

The lower profit was attributed to higher group operating costs of 3.7% to S$3.5 billion, due in part to the expansion in business but also a S$27.3 million impairment of its taxi business.

The company had also provided the following guidance for 2020, in relation to the coronavirus pandemic: ‘Our taxi, public transport and transport related businesses are witnessing lower ridership and volumes as we face significant operational challenges.’

With Covid-19 still rampant globally, analysts have lowered their profit forecast and share price targets for the group’s 2020 to 2022 financial years.

CIMB analysts said the latest rental reliefs will push ComfortDelGro’s taxi business ‘into the red’ for FY2020, while also ‘expecting earnings hits at its UK and Australia units due to the lockdowns imposed’.

As such they have cut their earnings per share forecast for FY2020 to FY2022 by 13.4% to 38.6% to account for the higher taxi rebates and idle rates, alongside a reduced 12-month share price target of S$1.55 per share (from S$2.08 previously).

DBS and RHB equity researchers have also lowered their ComfortDelGro earnings forecast for 2020 and 2021 by over 17% and over 10% respectively, citing similar factors.

DBS brokers slashed their 12-month price forecast for the ComfortDelGro stock to S$1.55 a share (from S$2.26), while RHB brokers went slightly lower to S$1.54 (from S$2.25).

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