Chairman Lim Jit Poh, in a rare statement at the company's annual general meeting on Monday, said dividends in recent years appeared higher largely because the company had been using up its Section 44 tax credits. This refers to a transitional period from the previous tax regime.

Mr Lim noted that 'analysts were not happy' at the release of SBST's 2008 year-end results because of 'the quantum of our dividend payout'.

SBST posted net full-year earnings of $40.6 million, $50 million, $56.1 million and $51.5 million for last year, 2007, 2006 and 2006, respectively.

Correspondingly, it declared final dividends of 3.6 cents for last year, from 3.25 cents in 2007, 6.5 cents in 2006 and 5 cents in 2005. These figures excluded special payouts.

'Analysts say that this is a sharp drop compared to the previous years,' Mr Lim said. 'We have always said that if we have no use for our excess cash, we will declare more dividends.

'But with the current credit crunch, our cash-flow management strategy has served us well.'

SBST has to invest more in new buses as well as manpower to meet higher service standards set out by the Public Transport Council (PTC).

The operator, majority-owned by ComfortDelGro Corp, has rolled out 500 low-floor buses since November 2007 at a cost of $180 million. By the end of this year, it expects to put 400 more buses worth $147 million on the road.

Early this month, the PTC fined SBST - as well as its rival SMRT Corp - for not meeting service standards.

Read the full report in Tuesday's edition of The Straits Times.