SBS Transit posts 2Q19 net profit increased 25 percent

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SBS Transit reported Thursday its second quarter net profit rose 24.5 percent on-year to S$24.19 million on higher revenue and lower premises costs, partly offset by higher expenses.

Revenue for the quarter ended 30 June rose 3.9 percent on-year to S$358.53 million, the transit company said in a filing to SGX.

Group operating costs increased by 2.1 percent on-year to S$328.0 million, the filing said.

Premises costs fell 25.6 percent on-year to S$11.74 million, while depreciation expense rose 11.8 percent on-year to S$25.87 million, on changes in accounting for leases, the filing said.

Public transport services posted revenue of S$342.9 million, up 3.9 percent on-year, mainly on higher average fare after the late-December fare increase, higher ridership from rail services and higher fees earned from operating higher mileage from bus services, SBS Transit said.

The average fare for the Downtown Line (DTL) rose 7.7 percent on-year and average daily DTL ridership increased 6.9 percent to 467,000 passenger trips, SBS Transit said.

The Northeast Line’s average fare rose by 2.6 percent on-year, and average daily ridership increased 1.5 percent on-year to 588,000 passenger trips, the filing said.

The Light Rail Transit (LRT) posted a 6.3 percent increase in its average fare, and an 8.0 percent increase in its average daily ridership to 139,,000 passenger trips.

SBS Transit declared a divided of 7.15 Singapore cents a share, up from 5.80 Singapore cents in the year-ago period.

Outlook

SBS Transit issued a cautious outlook.

“The group expects overall operating costs, to increase significantly with increased repairs and maintenance costs associated with an ageing bus and rail fleet, coupled with the full year cost impact of the Seletar and Bukit Merah Bus Packages,” SBS Transit said.

“Rail operations will continue to face challenges from increasing operating and maintenance costs which are essential for rail reliability. Growth in rail operating and maintenance costs has outstripped revenue growth over the years,” it added.

SBS Transit noted the Northeast Line and the Sengkang/Punggol LRT are in the mid-life cycle requiring higher maintenance, while the DTL is out of its defect liability period for most maintenance.

“Revenue from Public Transport Services is expected to be higher. However, we will continue to experience significant cost pressures from operating and maintenance costs,” it said.

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