SBS Transit Q1 net profit up 1.9% as ridership further improves

PUBLIC transport operator SBS Transit reported on Friday (May 12) a 1.9 per cent improvement in net profit for the first quarter on the back of higher revenue, as ridership improved.

Net profit for the three months ended Mar 31 rose to S$15.8 million, from S$15.5 million in the year-ago period, according to a business update by the company on the Singapore Exchange.

The improved profitability came despite SBS Transit facing an 8.3 per cent rise in operating costs to S$351.6 million, from S$324.7 million a year earlier. The increase was a result of higher fuel and electricity costs, which in turn were caused by higher average electricity prices and higher overtime costs.

SBS Transit’s operating profit for Q1 FY2023 stood at S$16.4 million, 15.6 per cent lower than the S$19.4 million in the year-ago period.

Revenue for the quarter rose 6.9 per cent to S$367.9 million, from S$344.1 million the year before, mainly due to higher fare revenue arising from higher rail ridership. 

The transport operator noted that all remaining Covid-19 restrictions were lifted from Feb 13. It added that riderships for the North East Line and Downtown Line were respectively at 89 per cent and 88 per cent of their pre-Covid levels in Q1. 

This was higher than the 67 per cent and 62 per cent respectively in the same period a year earlier, as well as the 85 per cent and 81 per cent respectively in Q4 2022. 

Commenting on the outlook ahead, SBS Transit said: “While we expect rail ridership and other commercial services revenue to continue to improve, we are cautious that a full recovery to pre-pandemic levels may still take time.”

The company added that bus revenue will reflect the full-year impact of the lower service fees for the five extended negotiated bus packages contracts, which came into effect from Sep 1, 2022.

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It also continues to face cost pressures, especially in energy and manpower, it said, adding that it “will continue to invest in technology and improve productivity to partially counter these”.

SBS Transit shares fell 0.4 per cent or S$0.01 to close at S$2.64 on Friday, before the announcement.