11 August 17 The Business Times by SAMUEL EE
BUS contracting and higher rail ridership boosted SBS Transit's (SBST) net profit for the second quarter ended June 30 by 75.3 per cent to S$12.71 million, as revenue grew 7 per cent to S$287.8 million from the corresponding period a year ago.
SBST is the unit of land transport giant ComfortDelGro. It also operates a rail network.
Q2 operating costs rose 4.7 per cent to S$271.63 million mainly on staff costs, which were up 10 per cent to S$153.42 million. But this was offset by lower fuel and electricity costs - down 10.4 per cent to S$29.94 million - and repair and maintenance costs - up 4.1 per cent to S$34.54 million.
Together with lower other operating costs - down 30 per cent to S$15.65 million - operating profit rose 68 per cent to S$16.17 million.
Q2 earnings per share of 4.09 cents were higher than the 2.34 cents for the same period last year.
A tax-exempt one-tier interim dividend of 3.65 cents per ordinary share has been declared, up from 2.35 cents a year ago.
SBST's revenue is derived from public transport services and from other commercial services.
The former saw an 8.4 per cent increase to S$274.4 million due mainly to contribution from bus services with the transition to the Bus Contracting Model (BCM) and higher ridership from rail services, offset by lower average rail fare from the Dec 30, 2016, fare reduction.
The average daily ridership in Q2 for the Downtown Line grew by 14.1 per cent to 242,000 passenger trips, with higher average daily ridership for the North-East Line and Light Rail Transit too.
Q2 operating profit was S$7.26 million compared to an operating loss of S$435,000 a year before, due mainly to higher revenue, lower fuel and electricity costs and lower other operating costs, offset by higher staff costs and higher depreciation.
As for revenue from other commercial services, it fell 15.3 per cent in the second quarter to S$13.4 million due mainly to lower advertising revenue, with operating profit slipping 11.4 per cent to S$8.91 million.
For the first half, SBST's net profit climbed 49.6 per cent to S$22.94 million, on a 7.3 per cent increase in revenue to S$571.23 million.
Interim earnings per share were 7.38 cents, up from 4.96 cents last year.
Looking ahead, the company expects revenue from public transport services grow.
Bus service revenue is expected to be higher with a full-year contribution of revenue under the BCM, while rail service revenue will increase with continued growth in ridership although this will be affected by the Dec 30 fare reduction.
As for revenue from other commercial services, this is seen falling due mainly to the loss of the Loyang and Bulim packages.
Operating costs will be higher with higher staff costs following salary adjustments and increments, while repairs and maintenance are expected to be higher as more such works are carried out.
SBST shares closed one cent higher at S$2.59 on Thursday.