Decoding ComfortDelGro's 2025 Earnings Call

 This post was written with reference to the FY2025 earnings available publicly at https://www.comfortdelgro.com/investor-relation/financial-results/

When most of us hear ComfortDelGro, we picture the blue and yellow taxis idling away at our Singapore taxi stands. That is but one of many parts in ComfortDelGro's international diversified business, and their FY2025 earnings remind us that the investment thesis for CDG is much more than the Singapore taxi. 

CDG has quietly but aggressively transformed into a global smart mobility conglomerate. For the first time in the company's history, total revenue breached the $5 billion mark, growing 13.0% year-on-year (YoY) from $4.47 billion in FY2024 to hit $5.06 billion. Profit After Tax and Minority Interests (PATMI) also jumped 9.4% from $210.5 million to $230.3 million.

Let's breakdown this record-breaking year for CDG, and why CDG holds a place as one of my larger non-REIT, non-finance stock positions.

The International Growth Story (UK, Europe, Australia)

One significant metric from the earnings presentation is the geographical revenue split. In FY2025, 55.3% of CDG’s revenue came from outside Singapore, a significant jump from 49.1% in FY2024.

Overseas operations generated 44.7% of the group's total operating profit, a massive jump from just 34.9% a year ago.

Revenue from the UK and Europe exploded from $1.28 billion in FY2024 to $1.86 billion in FY2025. Operating profit excluding non-recurring items (OPE) for the entire Public Transport segment grew 15.1% (an increase of $19.6 million) to $149.5 million. This was driven by the renewal of London bus contracts at improved margins and the commencement of their Manchester operations in January 2025.

CDG recorded a substantial net gain on disposal of $28.5 million (up from just $0.1 million last year), primarily from selling bus depots in Victoria as part of new 10-year Zero Emission Bus Franchise contracts. They immediately redeployed those proceeds to acquire an incumbent operator to service their expanding Australian network.

One-Off SG Tailwinds

While international expansion boosted the core, a massive tactical tailwind helped the bottom line in Singapore.

Operating profits (OPE) from CDG’s Inspection & Testing Services (primarily VICOM) skyrocketed by 56.1%, leaping from $34.6 million in FY2024 to $54.0 million in FY2025. This staggering jump was largely driven by the peak volume of On-Board Unit (OBU) installations for Singapore's Electronic Road Pricing (ERP) 2.0 rollout. Management capitalized perfectly on this mandated government project to generate immediate cash flow

Following a review of capital requirements, SBS Transit, a subsidiary of CDG, declared a jaw-dropping 31.99 cents per share special dividend. This means a huge cash injection from subsidiary to the parent company CDG, worth approximately SGD 74.25M based on 232.13M shares owned by CDG. 

CDG can deploy newly unlocked "dry powder" to fund its own international acquisitions (like Addison Lee), accelerate its fleet electrification, or ultimately, return excess cash back to us shareholders. 

The Taxi Drag

The Business-To-Customer B2C mass-market taxi and private hire vehicle (PHV) space remains a brutal battleground. The Singapore taxi fleet size decreased, and their Australian network contracted amid intense competition from ride-hailing platforms.

If CDG had relied solely on organic taxi growth, this segment would have suffered. Instead, they bought revenue. Total Taxi & Private Hire Operating Profit Excluding Non-Recurring Items (OPE) increased 4.4% YoY to $137.8 million. $27.1 million of that came directly from the strategic acquisition of London-based premium operator Addison Lee.

I see that the B2C point-to-point taxi business is structurally stagnant or even declining. I believe that management knows this, which is why they are actively shifting the portfolio toward B2B corporate accounts and premium segments (like Addison Lee and CMAC) where margins are protected from cheap ride-hailing price wars.

The Dividend Increase

One important thing to me is that earnings growth also grows my cash coming to my pockets. Because CDG enforces a strict 80% dividend payout ratio on PATMI, their dividend growth perfectly mirrored their profit trajectory.

The Board proposed a final dividend of 4.59 cents per share, up 8.0% from 4.25 cents last year. Combined with the interim 3.91 cents, the total FY2025 dividend is 8.50 cents per share, a 9.4% increase compared to 7.77 cents in FY2024. At a share price of roughly 1.50 SGD, that translates to a dividend yield of ~5.66%.

My Outlook on CDG

Management explicitly guided that the massive windfall from the OBU ERP 2.0 installations will progressively taper down in 2026 as the project reaches substantial completion. That specific revenue hose will be turned off.

To maintain their profit trajectory, CDG must rely on their new international infrastructure contracts to plug the gap. Some possible tailwinds up ahead include: The Stockholm E40 metro contract (which commenced in November 2025) will contribute for the full year in 2026. The Auckland City Rail Link will open and add to their network in the second half of 2026. Looking further ahead, the Paris Metro Line 15 and Singapore's Jurong Regional Line are slated for passenger service in 2027.

Perhaps the most ambitious target management revealed is their goal to transition 10% of their Point-to-Point fleet to Autonomous Vehicles by 2030. They are already deploying real-world robotaxis in China and Singapore, and exploring pilot projects in London. 

The switch to Autonomous Vehicles will fundamentally alter the unit economics of the transport industry. The driver is one of the largest variable costs involved in transport. Removing that cost not just improves business margins but quite literally reinvents their business model moving forward.

A near-term headwind would be the ongoing Iran crisis and its effect on driving up energy costs, with fuel and electricity accounting for roughly 7.5% of CDG operating costs. Particularly in the B2C taxi segments, rising fuel costs threaten the livelihoods of taxi drivers by eating into their daily earnings. CDG had to absorb a portion of the fuel cost hikes at its in-house pumps and deploy targeted fuel subsidies to incentivise taxi drivers to continue driving.

Public Transport segments are typically shielded from inflation effects on fuel. Bus and rail contracts tend to be heavily protected by indexation clauses. This means that as fuel prices skyrocket, revenues from governments and transport authorities would be automatically adjusted upward to compensate (with a slight time lag).

Conclusion

In my view, CDG is a reliable, asset-backed, dividend-paying company that helps me diversify away from Singapore banks and REITs. With all that said, CDG has surely found its place in my Dividends Portfolio.