Transport operator SBS Transit posted a 52.9 per cent rise in earnings to $19.43 million for the second quarter ended June 30, chiefly on the back of better bus performance.
The improvement came with a 19.8 per cent rise in revenue to $344.92 million, which SBST attributed mainly to higher fees earned following the start of the Seletar bus package in March, and higher ridership from its rail lines.
For the first half, SBST's net profit climbed 57.7 per cent to $36.2 million, largely due to a 17.8 per cent growth in revenue to $673.1 million.
Although its public transport services division remained profitable, SBST's new Downtown MRT line (DTL) continued to bleed - not uncommon for a new line as ridership lags behind costs. According to the Accounting and Corporate Regulatory Authority, the line posted a loss of $47.6 million for the full year ended Dec 31, 2017.
SBST's earnings per share for the second quarter stood at 6.24 cents, up from 4.09 at the same time last year. Its net asset value per share was $1.52, up from $1.44. But its margin before interest, tax and depreciation shrank from 14 per cent to 13.6 per cent.
Directors expect revenue from buses and trains to rise in the following quarters, adding that the company has started running the Seletar bus package, with the Bukit Merah bus package slated to start in the fourth quarter of this year.
AT A GLANCE
$344.9 million (+19.8%)
$19.4 million (+52.9%)
DIVIDEND PER SHARE:
5.8 cents (+58.9%)
Even as rail ridership is set to continue growing, they said the rail business "will continue to be challenging due to the fare reduction effective from Dec 29, 2017 and rising operating and maintenance costs".
"Operating costs will be higher with higher staff costs following salary adjustments and increments," the firm said. "Repairs and maintenance costs are expected to increase with DTL fully operational and higher maintenance requirements as the bus and train fleets age."
Nevertheless, directors are recommending an interim dividend of 5.8 cents per share, up from 3.65 cents previously. It will be paid on Aug 27.