Category: SBSTransit
Land Transport – DMG
New MRT line extension on East-West Line
Tuas West Extension (TWE) to add 7.5km to East-West Line (EWL). Transport Minister Raymond Lim announced that the EWL will be extended from Joo Koon station to Tuas West area. The TWE is expected to be fully operational by 2016 with ~100k daily commuters. Coupled with costs related to new train purchase (13 new trains will be acquired), constructions of a new train depot and a new road viaduct, the entire TWE is estimated to cost ~S$3.5b. While the addition of TWE is already known beforehand, its track length and operational date differ from previous indication of 14km and 2015 respectively. Despite the shorter length of TWE and delay in operational date, we maintain our belief that the Singapore rail ridership is on course for a multi-year growth trend as population size increases. Maintain OVERWEIGHT on land transport sector.
Circle Line Stage 4-5 to be operational in 4Q11. In addition to TWE addition announcement, the Transport Minister also confirmed our belief that CCL Stage 4-5 will only be operational in 2H11 (exact announced period is 4Q11) while the CCL Marina Bay extension will be ready in 2012. In order to achieve breakeven for CCL Stage 1-5 and the CCL Marina Bay extension, we estimate the daily ridership has to be in excess of 481k. While both TWE and CCL track additions will undoubtedly lead to increase in ridership for SMRT, we think that SMRT's earnings could be pressured in the short to medium term due to advance hiring associated with the CCL 4-5 beginning 2HFY11. Hence, we are maintaining NEUTRAL on SMRT with TP of S$2.08.
Prefer ComfortDelGro (CD) within the sector. We continue to favour CD over SMRT due to the former's 1) greater overseas growth potential, and 2) cheaper valuation. In addition to margin improvements from ridership increase, we think CD will be looking at acquisition of more land transport companies in foreign markets in order to achieve overseas growth. This is evidenced from CD's recent bidding for operational rights of metropolitan buses in Adelaide. The bidding involve six contracts to run 850 government-supplied buses in Adelaide for eight years. Should CD succeed in the bidding, it will have its first city bus service in Australia. The result of the bidding will be out in Mar 2011 and operations are slated to commence in Oct 2011. We think CD remains undervalued, possibly due to excessive concern regarding CD's forex exposure in relation to its extensive overseas operations in UK & Ireland (9M10: 13% CD's EBIT), Australia (9M10: 16% CD's EBIT), and China (9M10: 12% CD's EBIT). However, given the approximately even contributions from the emerging (China) and developed nations (UK, Ireland, Australia), we reckon the chances of adverse forex movement from sustained strengthening of S$ against the local currencies of CD's overseas operations as low. Maintain BUY on CD with TP of S$1.85. Currently, CD is trading at 14x FY11F PATMI vs SMRT's 18x FY11F PATMI.
SBSTransit – BT
SBS Transit Q3 profit up 20.4% to $12.7m
HIGHER bus and train ridership helped lift SBS Transit (SBST)’s net profit 20.4 per cent to $12.7 million for the third quarter ended Sept 30.
Revenue climbed 6 per cent year on year to $184.9 million, mainly on stronger bus and rail takings and higher advertisement earnings.
Operating expenses were 4.1 per cent higher at $169.1 million, mainly due to higher premises costs, higher fuel and electricity costs, higher depreciation expenses and higher other operating expenses. These were partly offset by lower repairs and maintenance costs.
Premises costs jumped 32.6 per cent to $9.3 million because of higher maintenance, including security fencing costs and the absence of Budget rebates from the government, while fuel and electricity cost 7 per cent more at $33.1 million.
Tax spiked 97.8 per cent to $3.1 million, due to certain receipts in the previous corresponding quarter being tax-exempt, as well as higher profits in the latest Q3.
Earnings per share increased to 4.14 cents, from 3.44 cents in Q3 last year.
SBST operates Singapore’s biggest public bus network, as well as a smaller rail network.
It said that Q3 revenue from bus operations rose 2.9 per cent to $140.2 million, mainly on a 5.7 per cent rise in average daily ridership compared with the same period last year.
Operating profit jumped 91.4 per cent to $3 million, mainly on higher bus fare revenue and lower repair and maintenance costs, although these were partly offset by hikes in premises costs, depreciations expense and other operating expenses.
Q3 rail revenue increased 13 per cent to $30.9 million as average daily ridership for the North-East Line rose 20 per cent, and that for the two light-rail transit systems went up 15.5 per cent. Operating profit improved 14.1 per cent to $4.1 million due to higher rail fare revenue.
But this was weighed down by higher electricity and staff costs, along with higher repair and maintenance costs.
Revenue from the advertisement business rose 42.2 per cent to $10.2 million, with operating profit 42.6 per cent higher at $6.1 million, mainly on higher bus advertisement revenue.
For the first nine months of the year, SBST’s net profit rose 2.6 per cent to $44 million, while revenue was 3.2 per cent higher at $539.3 million. Earnings per share for the nine months stood at 14.3 cents, up from 13.9 cents previously.
No dividend has been proposed. SBST’s stock closed one cent higher at $1.93 yesterday.
ComfortDelgro – BT
ComfortDelGro Q2 profit edges up
TRANSPORT group ComfortDelGro Corporation registered a marginal 1.6 per cent increase in year-on-year net profit to $58.2 million for the second quarter ended June 30.
Revenue rose to $789.3 million, from $758.3 million a year earlier, amid growth across various business segments.
While actual revenue grew by $46.2 million, negative foreign currency translation as a result of the weaker British pound and Chinese yuan reduced this to $31 million. Group operating expenses came in at $690 million, up 3.9 per cent year on year.
Earnings per share climbed to 2.79 cents, from 2.74 cents per share in Q2 2009. For the first half, net profit was 2.5 per cent higher year-on-year at $112.5 million, while revenue was 5.5 per cent higher at $1.55 billion.
Revenue from the bus business rose 5 per cent to $399.8 million in the latest Q2, while revenue from the taxi business was 3.5 per cent higher at $238.7 million.
Revenue from the rail business at SBS Transit jumped 14.3 per cent to $30 million, as average daily ridership for the North East Line and the two LRT systems rose 14.4 per cent and 9.6 per cent respectively.
For Q2, revenue from overseas made up 43.1 per cent of total, versus 44.3 per cent a year back, as a result of the weaker British pound, though this was offset by a stronger Australian dollar. Outside Singapore, Comfort operates in six countries including China, the UK, Ireland and Australia.
On future outlook, Comfort said revenue from its Singapore bus business will be boosted by expected ridership growth, while revenue from its Australia bus operations will improve with increased services, but revenue from its UK bus business is expected to be affected by exchange rates.
Revenue from the rail business is also expected to benefit from ridership growth, while the taxi business in Singapore should register higher revenue with more cashless transactions and new taxis.
‘As global economic conditions remain uncertain, the group will continue to focus on the demand patterns of its customers, control expenses even though fuel and electricity costs will continue to pose challenges, and remain vigilant while seeking opportunities for growth,’ Comfort said.
At June 30, the group had cash and short-term deposits of $508.6 million and liquid investments of $35.1 million, for a total of $543.7 million. After offsetting borrowings of $580.8 million, it had a net debt position of $37.1 million and a net gearing ratio of 1.6 per cent.
Comfort has declared an interim dividend of 2.7 cents, to be paid on Sept 7.
Comfort’s shares closed one cent higher yesterday at $1.55.
ComfortDelgro – BT
ComfortDelGro Q2 profit edges up
TRANSPORT group ComfortDelGro Corporation registered a marginal 1.6 per cent increase in year-on-year net profit to $58.2 million for the second quarter ended June 30.
Revenue rose to $789.3 million, from $758.3 million a year earlier, amid growth across various business segments.
While actual revenue grew by $46.2 million, negative foreign currency translation as a result of the weaker British pound and Chinese yuan reduced this to $31 million. Group operating expenses came in at $690 million, up 3.9 per cent year on year.
Earnings per share climbed to 2.79 cents, from 2.74 cents per share in Q2 2009. For the first half, net profit was 2.5 per cent higher year-on-year at $112.5 million, while revenue was 5.5 per cent higher at $1.55 billion.
Revenue from the bus business rose 5 per cent to $399.8 million in the latest Q2, while revenue from the taxi business was 3.5 per cent higher at $238.7 million.
Revenue from the rail business at SBS Transit jumped 14.3 per cent to $30 million, as average daily ridership for the North East Line and the two LRT systems rose 14.4 per cent and 9.6 per cent respectively.
For Q2, revenue from overseas made up 43.1 per cent of total, versus 44.3 per cent a year back, as a result of the weaker British pound, though this was offset by a stronger Australian dollar. Outside Singapore, Comfort operates in six countries including China, the UK, Ireland and Australia.
On future outlook, Comfort said revenue from its Singapore bus business will be boosted by expected ridership growth, while revenue from its Australia bus operations will improve with increased services, but revenue from its UK bus business is expected to be affected by exchange rates.
Revenue from the rail business is also expected to benefit from ridership growth, while the taxi business in Singapore should register higher revenue with more cashless transactions and new taxis.
‘As global economic conditions remain uncertain, the group will continue to focus on the demand patterns of its customers, control expenses even though fuel and electricity costs will continue to pose challenges, and remain vigilant while seeking opportunities for growth,’ Comfort said.
At June 30, the group had cash and short-term deposits of $508.6 million and liquid investments of $35.1 million, for a total of $543.7 million. After offsetting borrowings of $580.8 million, it had a net debt position of $37.1 million and a net gearing ratio of 1.6 per cent.
Comfort has declared an interim dividend of 2.7 cents, to be paid on Sept 7.
Comfort’s shares closed one cent higher yesterday at $1.55.
ComfortDelgro – BT
ComfortDelGro’s Q1 profit up 3.4%
Bus business led growth, accounting for over 60% of rise in group revenue
GROWTH in ComfortDelGro’s key businesses boosted revenue by 7.0 per cent to $766.9 million for the first quarter ended March 31, 2010, and this helped net profit to inch up 3.4 per cent to $54.3 million. The results translated to earnings per share of 2.6 cents, up from 2.52 cents a year earlier. The world’s second largest land transport group said the bus business led growth by accounting for over 60 per cent of the increase in group revenue. And Q1 revenue from overseas operations now accounts for 42.9 per cent of total group revenue, up from 40.3 per cent previously.
In line with the revenue growth, operating profit grew by 11.2 per cent to $90.6 million. But taxation expense jumped 43.7 per cent to $17.1 million for the quarter due to higher taxable profits and a writeback of deferred taxation of $5.2 million in Q1 2009.
ComfortDelGro managing director and group CEO Kua Hong Pak said: ‘We have continued to grow both our top line and bottom line but we are mindful that the global economic recovery remains fragile and there are significant challenges ahead.’
First quarter revenue from the bus business climbed 8.8 per cent to $379.3 million on growth in the Australian business and the positive translation effect of the stronger Australian dollar. But revenue from the China business slipped 2.8 per cent to $14.1 million due to lower ridership from the prolonged winter in Shenyang.
In the UK, bus revenue was down 0.7 per cent at $129.9 million due to tighter quality incentive targets.
In Singapore, listed unit SBS Transit’s Q1 revenue fell 2.8 per cent to $174.6 million on lower bus fare revenue. As a result, net profit slumped 12.7 per cent to $16.4 million. SBST said the fall in bus fare revenue was partially offset by higher rail fare revenue and advertisement revenue.
Q1 operating expenses also dropped 2.1 per cent to $155.6 million, mainly due to lower fuel and electricity costs, lower repairs and maintenance and lower other operating expenses but partially offset by higher depreciation expenses.
ComfortDelGro said revenue from the overseas bus businesses continues to outstrip that of the Singapore operations, accounting for 60.9 per cent of total group bus revenue, against 55.3 per cent in the same period last year.
Apart from the bus business, ComfortDelGro’s taxi, automotive engineering services, rail, vehicle inspection and testing, and driving centre businesses also experienced growth in Q1. At group level, growth in the Singapore and UK taxi operations allowed Q1 revenue to expand 5.0 per cent to $236.6 million. Revenue from the rail business rose 4.6 per cent to $28.7 million on higher average daily ridership for the North East Line, and the Punggol and Sengkang LRT lines. Together with rental and advertising income, total Q1 revenue from the rail business grew by 6.7 per cent to $31.9 million. Q1 revenue for the vehicle inspection and testing business was up 6.7 per cent to $20.7 million on a greater number of vehicles inspected, as well as the higher number of projects completed by the non-vehicle testing unit.
ComfortDelGro shares closed yesterday at $1.49.