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Taxi Industry: Low traffic

The taxi industry is currently suffering from competition resulting in lower utilization rates. On Blue Bird (BIRD), with 9M15 revenue of IDR4tn (+17% y-y), we now expect its full-year 2015F revenue to reach IDR5.6tn, up 17% y-y, the lowest y-y growth since 2012 (2014: 21%; 2013: 26%; 2012: 21%). For Express (TAXI), given 9M15 revenue of IDR721bn (+13% y-y), we now just project 2015F revenue of IDR953bn, +7% y-y, due to low utilization rates.

Following BIRD management’s decision to lower fleet purchasing this year to only 1,500 units, we now assume the same amount, down from 3,000 units previously. This translates to total capex of IDR1.4tn (IDR1.6tn previously) in 2015F. However, as BIRD’s 9M15 daily incomes reached around IDR640k/unit based on our analysis, we raise our daily 2015F income assumption to IDR640k from IDR623k/unit previously. For TAXI, we expect no additional fleet in 2015-16F, but expect renewal units of around 500-1,000 taxis, causing higher daily regular taxi fixed rate.

Following worse-than-expected 3Q15 results with net loss of IDR21bn, translating into 9M15 net profit of only IDR11bn, we expect TAXI to remain in the red for 4Q15. Accordingly, we cut our 2015F earnings by 85% to net profit of only IDR6bn. In 2016F, we expect some recovery with net profit of IDR19bn driven by cost efficiencies. Overall, we cut TAXI’s earnings by 47-85% in 2015F-16F. For BIRD, we only make minor changes to its 2015F-16F earnings.

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