SBSTransit – BT

SBST Q2 profit dives 34.2%

Higher fuel costs and other operating expenses put the brakes on SBS Transit’s net profit in the second quarter ended June 30: it slumped 34.2 per cent to $9.8 million.

But SBST’s Q2 revenue inched up 3.2 per cent to $185.7 million as average daily ridership for both bus and rail grew.

SBST is a unit of land transport giant ComfortDelGro. It operates a fleet of about 3,000 buses, or three-quarters of Singapore’s public buses, as well as a smaller rail network.

Q2’s total operating expenses rose 6.8 per cent to $173.5 million, with fuel and electricity costs jumping 23.7 per cent to $44.1 million, and other operating expenses growing 14.8 per cent to $15 million. Staff costs, the biggest component of operating expenses, were relatively stable, inching up one per cent to $73.7 million.

As a result, operating profit in Q2 plunged 29.9 per cent to $12.1 million.

Revenue from bus operations in Q2 was 1.7 per cent higher at $139.7 million due to a 6.5 per cent growth in average daily ridership, although this was offset by lower average fares with the implementation of distance fares. Q2 saw an operating loss of $1.5 million compared with an operating profit of $4 million a year ago.

Revenue from Q2 rail operations rose 11.1 per cent to $33.3 million, as average daily ridership for the North-East Line and the two LRT systems saw increases of 15.7 per cent and 15.8 per cent respectively from a year ago. But average fares were lower. Still, operating profit for Q2 was up 3.7 per cent to $5.3 million on higher rail fare revenue, offset by higher electricity costs.

For the first half, SBST’s net profit fell 30.8 per cent to $21.6 million, even as H1 revenue rose 4.3 per cent to $369.6 million.

Q2 earnings per share dropped to 3.17 cents from 4.83 cents in Q2 2010, while H1 earnings per share sank to 7.01 cents from 10.16 cents previously. Net asset value as at June 30 was 106 cents, up from 103 cents six months earlier. A one-tier interim dividend of 3.1 cents has been declared.

Looking ahead, the company says it expects bus and rail ridership to increase, and advertising and rental revenues to be maintained. But fuel and electricity costs will be higher if the current price trend continues, while staff costs are likely to rise due to salary increments, increases in the CPF employer contribution rate and foreign worker’s levy, as well as cessation of Jobs Credit.

Another ComfortDelGro unit, Vicom, also announced its Q2 results yesterday. The inspection and testing company said net profit rose 4.8 per cent to $5.9 million. Revenue was 5.6 per cent higher at $22.3 million, mainly on higher revenue from the core businesses of vehicle inspection, and test and inspection services.

For H1, Vicom’s net profit rose 10.5 per cent to $12 million, while H1 revenue was up 8 per cent at $44.7 million. Earnings per share in Q2 was 6.72 cents, up from 6.51 cents in the previous corresponding quarter. H1 earnings per share was 13.76 cents, up from 12.65 cents a year ago. An interim dividend of 6.9 cents has been declared.

SBST shares closed half a cent lower at $1.73 while Vicom ended one cent higher at $3.51 yesterday.

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