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.

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.

SBS Transit to operate Downtown Line

LTA shortens licence period to 15 years to boost contestability

The Downtown Line (DTL), the first stage of which will open in 2013, will be operated by SBS Transit (SBST) under the new rail financing framework.

The Land Transport Authority (LTA) yesterday announced that it has awarded the licence to operate the DTL to SBST with a shorter licence period to enhance contestability in the rail sector, with the operating assets to be owned by LTA.

The DTL is the first rail line put up for competitive tender under the new rail financing framework. The framework was announced by the government last year to inject greater contestability in the industry and achieve the Land Transport Master Plan's objectives by driving greater efficiency and service improvements.

Under the framework, the period for new Rapid Transit System (RTS) licences is being shortened from the existing 30-40 years to about 15 years. This means SBST's licence to run the DTL will end 15 years after the full completion of the line in 2017.

LTA says that a shorter licence enhances the level of contestability as the operator faces the prospect of competition at the end of its licence terms.

At the same time, LTA can refresh the licence conditions when the licence ends to allow for changes in the operating and business environment.

The new framework also makes the LTA, not the operator, the owner of the rail operating assets. The authority will decide on the replacement of and investment in trains and operating assets, thus allowing it to influence train carrying capacity and service levels more directly.

Also new is an annual Licence Charge that SBST as the appointed DTL operator will have to pay for 19 years – from 2013, when the first stage of the line is opened, until 15 years after 2017 when all three stages of the DTL are completed. Total payment during this 19-year period is expected to be $1.6 billion.

The DTL is a medium-capacity RTS that will facilitate direct travel from north-western and north-eastern Singapore to the Central Business District and Marina Bay. When fully operational, daily ridership is expected to be 500,000 initially and rising to 700,000 over time.

SBST, which operates three out of four public buses in Singapore, already runs the fully automated North-east Line (NEL) as well as the Sengkang and Punggol Light Rail Transit (LRT) systems.

The fully automated underground DTL will increase SBST's rail network from 40km currently to 82km, and its share of Singapore's total rail network will rise to 36 per cent.

But SMRT Trains remains the bigger rail network here with its North-South and East-West MRT Lines, as well as the recently fully opened Circle Line.

SBS Transit to operate Downtown Line

LTA shortens licence period to 15 years to boost contestability

The Downtown Line (DTL), the first stage of which will open in 2013, will be operated by SBS Transit (SBST) under the new rail financing framework.

The Land Transport Authority (LTA) yesterday announced that it has awarded the licence to operate the DTL to SBST with a shorter licence period to enhance contestability in the rail sector, with the operating assets to be owned by LTA.

The DTL is the first rail line put up for competitive tender under the new rail financing framework. The framework was announced by the government last year to inject greater contestability in the industry and achieve the Land Transport Master Plan's objectives by driving greater efficiency and service improvements.

Under the framework, the period for new Rapid Transit System (RTS) licences is being shortened from the existing 30-40 years to about 15 years. This means SBST's licence to run the DTL will end 15 years after the full completion of the line in 2017.

LTA says that a shorter licence enhances the level of contestability as the operator faces the prospect of competition at the end of its licence terms.

At the same time, LTA can refresh the licence conditions when the licence ends to allow for changes in the operating and business environment.

The new framework also makes the LTA, not the operator, the owner of the rail operating assets. The authority will decide on the replacement of and investment in trains and operating assets, thus allowing it to influence train carrying capacity and service levels more directly.

Also new is an annual Licence Charge that SBST as the appointed DTL operator will have to pay for 19 years – from 2013, when the first stage of the line is opened, until 15 years after 2017 when all three stages of the DTL are completed. Total payment during this 19-year period is expected to be $1.6 billion.

The DTL is a medium-capacity RTS that will facilitate direct travel from north-western and north-eastern Singapore to the Central Business District and Marina Bay. When fully operational, daily ridership is expected to be 500,000 initially and rising to 700,000 over time.

SBST, which operates three out of four public buses in Singapore, already runs the fully automated North-east Line (NEL) as well as the Sengkang and Punggol Light Rail Transit (LRT) systems.

The fully automated underground DTL will increase SBST's rail network from 40km currently to 82km, and its share of Singapore's total rail network will rise to 36 per cent.

But SMRT Trains remains the bigger rail network here with its North-South and East-West MRT Lines, as well as the recently fully opened Circle Line.

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.