SBS Transit's Q1 earnings up 23% on better margins from bus contracts

Transport operator SBS Transit's profit margin before interest, tax and depreciation improved to 14.8 per cent, up from 13.6 per cent in the previous corresponding quarter.
Transport operator SBS Transit's profit margin before interest, tax and depreciation improved to 14.8 per cent, up from 13.6 per cent in the previous corresponding quarter.PHOTO: ST FILE

SINGAPORE - Transport operator SBS Transit (SBST) posted a 23.3 per cent increase in earnings to $20.7 million for the first quarter ended March 31 as better margins from bus contracts continued to flow in.

Revenue crept up by 6.9 per cent to $350.8 million, slightly ahead of a 5.5 per cent rise in operating expenses to $324.5 million.

Earnings per share rose from 5.39 cents to 6.63 cents. Net asset value per share stood at $1.64, up from $1.60 at end-2018.

SBST's profit margin before interest, tax and depreciation improved to 14.8 per cent, up from 13.6 per cent in the previous corresponding quarter.

The ComfortDelGro-owned company on Monday (May 13) attributed its results mainly to "higher fees earned with higher operated mileage from bus services, and higher ridership and average fare from rail services".

Average daily ridership on the Downtown MRT line grew by 10.4 per cent to 476,000 trips. Ridership on the more mature North East Line grew by 3.2 per cent to 603,000 trips. The Sengkang-Punggol LRT saw a 10.4 per cent rise in ridership to 141,000 trips.

The company's non-transit businesses also did better, mainly because of higher advertising revenue.

SBST remained in a viable financial position. Group total assets increased by 4.9 per cent to $1.11 billion, while group total liabilities increased by 6.9 per cent to $603.5 million.

 
 

It had a net cash outflow of $26.6 million for the quarter, mainly from the repayment of borrowings, funding operating activities, the purchase of vehicles, premises and equipment, and the repayment of lease liabilities, partially offset by the new loans raised.

As at March 31, the group had cash and bank balances of $6.1 million. After accounting for the borrowings of $94.5 million, it had a net debt position of $88.4 million.

Net gearing ratio stood at 17.3 per cent, up from 8.5 at end-2018. Gross gearing ratio was 18.5 per cent, up from 15.

Looking ahead, its directors expect transit revenue to continue to grow, with full-year contribution from the Seletar and Bukit Merah government bus contracts.

They expect the rail business to grow on the back of rising ridership, as well as from a 4.3 per cent fare rise that came into effect on Dec 29, 2018.

But they said this will be offset by higher operating and maintenance costs as the North East MRT line and Sengkang-Punggol LRT lines undergo "mid-life cycle" repairs.

Last week, sister company Vicom - a vehicle inspection outfit also owned by ComfortDelGro - reported a 4.7 per cent rise in first-quarter earnings to $7.5 million. This was on the back of a 4.1 per cent improvement in revenue to $25.5 million.