Higher fares, rising ridership push SBS Transit Q2 profit 24.5% higher to $24.2m

For the first half, SBS Transit saw its net profit climbing by 23.9 per cent to $44.9 million on a 5.4 per cent rise in revenue to $709.3 million.
For the first half, SBS Transit saw its net profit climbing by 23.9 per cent to $44.9 million on a 5.4 per cent rise in revenue to $709.3 million.PHOTO: ST FILE

SINGAPORE - Bus and rail operator SBS Transit posted a 24.5 per cent rise in net earnings to $24.2 million for the second quarter ended June 30 on the back of higher fares and rising ridership.

Revenue for the ComfortDelGro subsidiary grew by 3.9 per cent to $358.5 million, while cost crept up by 2.1 per cent to $328 million.

For the first half, the transport provider saw its net profit climbing by 23.9 per cent to $44.9 million on a 5.4 per cent rise in revenue to $709.3 million.

As at June 30, SBS Transit's trade receivables stood at $144.8 million, 17.2 per cent higher than at Dec 31, 2018. In contrast, its trade payables stood at $228.3 million, 22.3 per cent lower.

Per share, second-quarter profit was up from 6.24 cents to 7.76 cents. Net tangible asset backing per share stood at $1.64, up from $1.60. Margin before depreciation, interest and tax widened to 15.7 per cent, from 13.6 per cent for the same period last year.

SBS Transit said average fares for its MRT Downtown Line (DTL) were 7.7 per cent higher in the second quarter, while average daily ridership for the new line grew by 6.9 per cent to 467,000 passenger trips.

Average fares for the North-East Line and Sengkang-Punggol LRT were 2.6 and 6.3 per cent higher, respectively. Ridership was up 1.5 per cent to 588,000 a day for the NEL, and up 8 per cent to 139,000 trips for the LRT.

Its non-transit business also fared better, largely from higher advertising revenue.

 

It had a net cash inflow of $1.5 million for the quarter, mainly from new loans raised and net cash from operating activities.

As at June 30, SBS Transit had cash and bank balances of $7.6 million. After accounting for $101 million in borrowing, it had a net debt position of $93.4 million, and a net gearing ratio of 18.2 per cent (up from 8.5 per cent at Dec 31, 2018). Its gross gearing ratio was 19.7 per cent, up from 15 per cent at Dec 31.

Directors expect revenue to continue growing on the back of higher fares and ridership, in part from full-year contributions from the Seletar and Bukit Merah bus contract packages.

They said total rail revenue is not sufficient to cover operating and maintenance costs of rail operators "despite the 4.3 per cent fare adjustment from Dec 29, 2018".

Nonetheless, directors are recommending an interim dividend of 7.15 cents per share, up from 5.8 cents for the same time last year.