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Profit Decline Forces ComfortDelgro to Pay Lower Dividend of 2.9 Cents per Share

A feeling of deja vu?

The title of the blog sounds like the one for Wilmar published recently?

Some people might just take a look at the title and run screaming for the hills.

Not AK the mental investor for income!

AK takes a look at the title and runs towards ComfortDelgro!

I have said for a long time now that, unlike Grab, ComfortDelgro is a profitable company.

So, ComfortDelgro actually has a PE ratio unlike Grab.

I make it sound funny but, of course, it really isn’t a joke.

It isn’t a secret that I think Grab and friends are just doing green washing and burning investors’ money.

So easy to burn money when it is not our own.

Anyway, just like with Wilmar, I just zoom in on what matters to me as an investor for income.

I first look at what’s the reason for a 31.9% drop in interim earnings?

Oh, last year, there was a one-off gain.

Then, there is the fact that the British Pound and the Australian Dollar depreciated against the Singapore Dollar over the last one year.

Taking all these points into consideration, ComfortDelgro actually did quite well.

What I really want to see is sequential improvement and I was not disappointed.

1H 2023 saw PATMI or profit attributable to company shareholders increased 35.9% from 2H 2022.

Pretty impressive.

As an investor for income, I am also pleased to see that ComfortDelgro has operating profit improved 18.5% from 2H 2022 to 1H 2023 too.

Not bad.

Why do I look at these numbers?

I am interested in profits generated by its core operations as this is recurring and will determine if the company is able to continue paying a dividend.

Even during the pandemic, ComfortDelgro was still paying dividends despite their businesses taking big hits.

They were able and willing to do it because they had a strong balance sheet and believed shareholders should be rewarded.

Investing in ComfortDelgro is to invest in a company with a very strong balance sheet.

Investing in ComfortDelgro is to invest in a company that is shareholder friendly.

The chairman said, “We believe in rewarding our shareholders.”

I said some time ago that I reduced my investment in ComfortDelgro at $1.35 a share and booked a loss.

That was to raise funds to increase my investment in OCBC and UOB.

That was sometime in Q4 last year, if I remember correctly.

Unfortunately, I was pacing my purchases too slowly and their share prices shot up too quickly.

When ComfortDelgro’s share price went to $1.15 some time later, I plonked the money on hand back into the business.

At $1.15 a share, I thought it offered fairly good value for money.

ComfortDelgro is still one of my largest investments although I am unlikely to increase exposure.

This is because my war chest is pretty exhausted and I have yet to achieve my goal of making my investments in our local lenders form 40% of my portfolio.

ComfortDelgro continues to bring home the bacon and I am looking forward to it.

As usual, AK is just talking to himself.

If AK can do it, so can you!

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