SINGAPORE - SBS Transit posted a 27 per cent rise in first-quarter net earnings to S$10.2 million on the back of better margins from bus contracting.
The ComfortDelGro-owned transport operator reported a 7.6 per cent increase in revenue to S$283.4 million for the period ended March 31. Lower finance and other operating costs shored up its bottom-line.
Earnings per share stood at 3.3 cents, up from 2.61 cents same time last year. Group net asset value per share was S$1.38, versus S$1.35.
SBS Transit's margin before interest, tax and depreciation improved from 11.2 per cent to 13.2 per cent.
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SBS Transit said revenue from public transport services was bolstered mainly by the transition to the Bus Contracting Model, as well as higher ridership from rail services.
The higher intake was partially offset by lower average rail fare from the fare reduction that took effect from Dec 30, 2016.
Meanwhile, revenue from commercial services slid by 16.5 per cent to S$14 million, largely because of lower advertising revenue.
The company reported a net cash inflow of S$6.3 million for the first three months, mainly from new loans raised and partially offset by repayment of borrowings, cash used in operations and purchase of vehicles.
At the end of the period, SBS Transit had cash and bank balances of S$10.5 million.
After accounting for borrowings of S$282.6 million, it had a net debt position of S$272.1 million and a net gearing ratio of 63.4 per cent - up from 50.7 per cent as at Dec 31.
Directors expect revenue from public transport services to be higher for the remaining three quarters.
Its rail business will continue to see ridership growth, while its bus operation will see a full-year contribution of revenue under the Bus Contracting Model.
SBS Transit said revenue from its non-transit commercial operations is expected to be lower, mainly because it had lost the Loyang and Bulim bus route packages.
Operating costs will be higher with salary adjustments as well as the build-up of headcount ahead of the opening of Downtown Line 3.
Repairs and maintenance costs are also expected to be higher.