Transport operator SBS Transit posted a strong surge in net earnings for the third quarter ended Sept 30.
The ComfortDelGro-owned company yesterday said profit attributable to shareholders rose by 77.5 per cent to $19.7 million. This came on the back of a 19.1 per cent rise in revenue to $351.4 million, driven by higher ridership.
Earnings per share rose from 3.57 to 6.33 cents. Net asset value per share stood at $1.53, up from $1.44.
Its margin before depreciation, tax and interest improved from 13 to 13.4 per cent.
Expenses, led by power and fuel costs, climbed 16.5 per cent to $327.4 million. Investment income shot up by 57.4 per cent to $96,000, while finance cost shrank by 27.3 per cent to $831,000.
SBS Transit said revenue was driven by higher bus contracting fees earned with the start of the Seletar Bus Package in March.
Higher rail ridership with the start of Downtown Line 3 in October last year also contributed.
For the quarter, average daily ridership for the entire Downtown Line grew by 82.9 per cent to 472,000 trips. Average daily ridership for the more mature North-East Line grew by 3.9 per cent to 608,000 trips. Ridership on the Sengkang and Punggol LRT lines rose by 11.2 per cent to 136,000 trips.
The operator said despite the increase in rail ridership, rail operations continued to incur losses "as the fare revenue was not sufficient to cover rising operating and maintenance costs".
Observers expect the business to turn around as the line matures and ridership grows.
Revenue from other commercial services fell by 7.7 per cent to $13.4 million on the back of lower advertising revenue.
For the first nine months, SBS Transit's net profit was 64.2 per cent higher at $55.9 million.
As at Sept 30, total equity increased by 5.9 per cent to $475.9 million. The operator's net cash inflow of $1.6 million for the quarter was mainly from new loans raised and net cash generated from operations, partially offset by repayment of borrowings, dividends and interest paid and the purchase of vehicles, premises and equipment.
SBS Transit had cash and bank balances of $8.1 million as at Sept 30. After accounting for the borrowings of $131.5 million, it had a net debt position of $123.4 million, with a net gearing ratio of 25.9 per cent - down from 39.1 per cent on Dec 31 last year.
Its gross gearing ratio was 27.6 per cent, down from 40.3 per cent.
Looking ahead, the company expects bus revenue to be higher with the start of the Bukit Merah Bus Package in the fourth quarter.
Rail revenue is expected to be higher on account of full-year contributions from Downtown Line 3.
Industry watchers expect the 4.3 per cent fare rise approved by the Public Transport Council, which takes effect from Dec 29, to contribute to next year's results.