International Business & Economy S$20.7 million in profits for SBS in Q1 2019 due to more...

S$20.7 million in profits for SBS in Q1 2019 due to more riders and higher bus mileage

SBS Transit has expressed optimism that its revenue will continue to grow from both bus and rail transport services

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Singapore — Because of higher mileage for its bus service and greater rail ridership, as well as the 4.3 percent fare adjustment which started at the end of last year, SBS Transit posted a 23.3 percent increase in net profit for the first quarter of 2019. This amounts to S$20.7 million.

SBS said that its profits are due to “higher fees earned with higher operated mileage from bus services and higher ridership and average fare from rail services”.

The average daily ridership for SBS’ Downtown line has grown by over ten percent to 476,000 passenger trips. For the North-East Line (NEL), average ridership has grown by a little over 3 percent and is now up to 603,000 passenger trips. Light Rail Transit passenger trips similarly grew by over ten percent and is now at 141,000.

This is good news, since earnings per share, which was at 5.39 cents in the first quarter of 2018, is now at 6.63 for the same time period in 2019.

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According to a report from The Business Times, SBS Transit has expressed optimism that its revenue will continue to grow from both bus and rail transport services. Full-year earnings from the Seletar and Bukit Merah Bus Packages, which opened in March and November 2018 respectively, are yet to be taken into account.

The impact of the year-end fare adjustment for the SBS rail services, as well as increased ridership, are also expected to bring in greater revenue.

But SBS itself has issued a statement saying that its costs for operations is expected to increase as well.

“The rail business will continue to face challenges from operating and maintenance costs. Repairs and maintenance costs are expected to rise with the NEL/SPLRT fleet in its mid-life cycle.

With the full year operations for the Seletar and Bukit Merah Bus Packages, overall operating costs will increase. Staff costs are expected to be higher following salary adjustments and increments to retain and attract staff. Repairs and maintenance costs are expected to increase with the higher fleet size, higher maintenance requirements for the aging bus fleet and the NEL/SPLRT fleet as well as investments in predictive maintenance capabilities to continuously enhance service reliability.”

Shares for the company closed five cents (1.25 percent) higher on May 13, Monday, at S$4.05.

The company’s financial position has remained viable. SBS Transit Group’s total assets have grown by 4.9 percent to S$1.11 billion, while its total liabilities also rose by 6.9 percent and is now at S$603.5 million.

SBS Transit has a net cash outflow of S$26.6 million for the first quarter of the year, which has primarily come 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, according to a report in The Straits Times.

At the end of the quarter, SBS Transit had cash and equivalents of S$6.1 million, for a net debt position of S$88.4 million, taking into account borrowings of S$94.5 million.

The company’s non-transit endeavours are also proving to be profitable, due to greater revenue from advertising. -/TISG

Read related:  New SBS Transit train design helps viewers make better choices online

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