Swan Taxis suffers $7m loss

Swan Taxis has reported a big annual loss, after being hit by a large reduction in revenue over the past year and shutting down two of its operating divisions. 

The Perth transport company, owned by ComfortDelGro which is listed on the Singapore stock exchange, posted revenue of $12.9 million in 2019, down from $16.7 million revenue in 2018.

It recorded a net loss of $6.9 million in the 2019 calendar year, compared with a $2.1 million profit in 2018.

The loss can be attributed to the fall in revenue, and a $4.8 million impairment expense.

Swan Taxis chief executive Keong Lai told Business News the drop in revenue was due to a number of factors, including the industry deregulation in 2019 and a reduction in driver numbers. 

"One factor that did contribute to the drop was the introduction of deregulation brought into the industry in April 2019 i.e. the Transport (Road Passenger Services) Act 2018 and the introduction of the 10 percent passenger transport levy," Mr Lai said. 

"This saw the cost of the taxi journey increasing thus impacting demand. 

"The deregulation also led to the introduction of new individual on-demand transport operators in the market.

"The reduction in driver numbers affected Swan Taxis’ revenue through less rank fees and vehicle leasing fees secured from drivers."

In its financial statements, which Business News obtained from ASIC, Swan Taxis said the impairment was due to performance scrutiny in 2019, coupled with the uncertainty of COVID-19 restrictions in 2020.

The company closed its Purple Coaches division and its internal vehicle maintenance function in April 2020, and some employees were made redundant.

It said revenue projections were uncertain due to the instability within the industry as a result of COVID-19 restrictions and increased competition from rideshare services in the sector.

ComfortDelGro reported its taxi divisions, which operate in countries including Singapore, China and the United Kingdom, were heavily impacted by COVID-19 restrictions and revenue decreased by $44.1 million in the first half of 2020 worldwide.

In ComfortDelGro's full-year results for 2019, revenue for its taxi business fell by 8 per cent or $57.9 million to $668.6 million.

It said this was due to strong competition which resulted in a reduction in its operating fleet.

Contrary to the global company decision, last year in August, Swan Taxis announced plans to upgrade and expand its fleet with more hybrid vehicles.

The company said it would invest close to $15 million to acquire 500 new vehicles.

Mr Lai said the reinvestment of historical earnings and government support had provided the funds to weather the storm. 

"We are focused on coming out of this crisis a stronger organisation through efforts undertaken in streamlining our operations for efficiency and embarking on a digitalisation programme to further our efforts at delivering value to both our drivers and customers," Mr Lai said. 

"Despite this crisis we have delivered new vehicles into the fleet throughout the pandemic period with the view to improving the quality and standard of vehicles. 

"Most of these vehicles were hybrid cars that will also deliver a more sustainable and environmentally friendly operation.

"We are already trialling innovative collaborations to diversify our driver earnings and this includes working with other industry partners such as Shofer."