SBS Transit Q1 profit down 33% to S$15.5 million on increased operating costs

IN a business update on Friday (May 13), transport operator SBS Transit : S61 0% posted a profit after tax of S$15.5 million for the first quarter ended March 31, 2022, down 33.5 per cent from S$23.3 million in the corresponding period the year before.

This is despite an 8.5 per cent increase in revenue to S$344 million from S$317 million previously. After Covid-19 government reliefs, operating profit fell 22.2 per cent to S$19.4 million.

Operating costs rose 11.2 per cent to S$324.7 million, from S$292.1 million previously, mainly due to higher staff costs largely from the cessation of the Jobs Support Scheme, lower savings from the Wage Credit Scheme, as well as higher fuel and electricity costs. Electricity costs went up by more than 40 per cent this quarter compared to Q1 2021.

The higher costs were partially offset by lower expenses in the areas of repairs and maintenance, depreciation and other operating costs. The fare increase of 2.2 per cent from Dec 26, 2021, was unable to cover the rising costs, SBS Transit noted.

Equity for the group, after total liabilities are deducted from total assets, stood at S$618.4 million at the end of March 2022, up 2.8 per cent from S$601.6 million from December 2021, mainly due to profits generated from operations.

SBS Transit said it saw a pick-up in daily ridership levels this quarter compared to Q4 2021, on both the Downtown Line (DTL) and North-East Line (NEL). As at the end of March 2022, NEL and DTL’s ridership levels were 67 per cent and 62 per cent respectively of pre-Covid levels.

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The consolidated rail licence to operate DTL, NEL and Sengkang-Punggol LRT (SPLRT) under version 2 of the new financing framework for 11 years commenced on Jan 1, 2022. The group has also accepted the Land Transport Authority’s (LTA) 2-year extension for the tendered Seletar Bus Package, commencing on March 2023, it said.

With Covid-19 restrictions relaxed from Mar 29 and Apr 26, the group expects rail ridership and other commercial services revenue to improve.

Shares of SBS Transit closed flat at S$2.87 on Friday, before the announcement.