SBSTransit – BT

SBS Transit profit falls 32.4% to $36.7m

HIGHER fuel and staff costs slowed down SBS Transit in 2011, with its net profit for the full year ended Dec 31 sagging 32.4 per cent to $36.7 million.

But SBST’s full-year revenue crept up 4.2 per cent to $751.1 million while operating expenses rose 7.5 per cent to $705.4 million. As a result, full-year operating profit fell 29.4 per cent to $45.7 million. No fourth quarter numbers were released.

SBST is a unit of land transport giant ComfortDelGro. Its fleet of about 3,000 buses accounts for three-quarters of all public buses in Singapore. It also operates a rail network about a third the size of SMRT Corp’s.

Its revenue from bus operations rose 3.1 per cent to $566.1 million from the previous year on an increase in average daily ridership of 6 per cent, although this was offset by a lower average fare. But higher diesel and staff costs caused the bus division to suffer an operating loss of $6 million compared with an operating profit of $14.9 million in 2010 despite higher bus fare revenue.

As for rail operations, 2011 revenue rose 10.5 per cent to $134.4 million as average daily ridership for the North-East Line and the two Light Rail Transit systems climbed 12.9 per cent and 15.7 per cent respectively.

Despite lower average fares, operating profit improved 12.5 per cent to $19.7 million mainly because of higher rail fare revenue but offset by higher electricity and staff costs.

The revenue from advertising slipped 0.3 per cent to $36.2 million. On the other hand, rental revenue rose 3.9 per cent to $14.4 million on higher income from roadshows at the interchanges. But higher staff costs caused operating profit to slip 0.2 per cent to $10.3 million.

SBST’s FY11 earnings per share slumped to 11.87 cents from FY10’s 17.61 cents. But net asset value of 107 cents at end-2011 was higher than the 103 cents 12 months earlier.

A final dividend of 2.8 cents per share has been proposed, lower than the previous year’s 4.3 cents.

Looking ahead, SBST anticipates bus and rail ridership to increase at a slower rate due to the weaker economic growth expected.

Given the current price trend, the company also sees higher fuel and electricity costs, while staff costs are likely to grow with salary increments and higher foreign workers’ levy. Depreciation costs will rise with the renewal and expansion of the bus fleet, and all these will impact the bus segment significantly. Start-up costs are also expected for the Downtown Line, following the recent tender award.

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