SBS Transit reports 23% rise in net profit for Q2

SBS Transit said renewal and expansion of the bus fleet will likely result in higher depreciation and financing costs.
SBS Transit said renewal and expansion of the bus fleet will likely result in higher depreciation and financing costs.ST PHOTO: CAROLINE CHIA

Rising ridership, higher fares push earnings up but increase offset by higher costs

Second-quarter profit at SBS Transit rose on a rising number of bus and rail commuters paying higher average fares.

Net profit for the three months ended June 30 jumped 22.8 per cent to $6.1 million from the corresponding period the year before.

Revenue grew 8.4 per cent to $254.9 million.

For the first half of the year, profit jumped 31.5 per cent to $10.9 million, while revenue rose 9.6 per cent to $502.1 million. Profit for the three months increased mainly because of higher revenue and lower fuel and electricity costs.

  • AT A GLANCE

  • REVENUE $254.9 milion (+8.4%)

    NET PROFIT $6.1 million (+22.8%)

    INTERIM DIVIDEND 1.65 cents per share (+32%)

Still, the increase was offset by higher staff costs in both the bus and train businesses, and higher maintenance costs and depreciation in the bus business, among other factors. Revenue for the bus business rose 8.8 per cent to $202.6 million. The average daily ridership increased 3.5 per cent.

In the rail business, revenue increased 7 per cent to $52.3 million. The average number of daily riders also rose for the North-East Line, Light Rail Transit and Downtown Line Stage 1.

Earnings per share for the quarter was 1.97 cents, up from 1.61 cents last year. Net asset value per share was $1.08 on June 30, up from $1 on Dec 31.

SBS Transit declared an interim dividend of 1.65 cents, up from 1.25 cents last year.

Looking ahead, the company said revenue is expected to be higher due to higher ridership and fares.

It also expected staff costs to rise, with staff numbers increasing due to the Bus Service Enhancement Programme and the Downtown Line 2 project. Renewal and expansion of the bus fleet will also likely result in higher depreciation and financing costs, it said. It added: "The bus and rail segments will continue to face challenges."

A version of this article appeared in the print edition of The Straits Times on August 13, 2015, with the headline 'SBS Transit reports 23% rise in net profit for Q2'. Print Edition | Subscribe