SBS Transit's H1 net profit down 27.4% on lower ridership

TRANSPORT operator SBS Transit posted a 27.4 per cent fall in net profit to S$32.6 million for the half-year ended June 30, 2020 as the use of public transport declined during the pandemic.

The impact of Covid-19 on the group's bottom line was largely cushioned by government grants of S$61.6 million, with most of the support coming from a 10-month wage subsidy. Without the government grants, the company would have incurred an operating loss of S$29.4 million.

Revenue was down 14.9 per cent to S$603.2 million, mainly due to lower rail ridership during the "circuit breaker" period in Singapore.

Total operating expenses fell 12.5 per cent to S$571 million. The group mostly saw a dip in expenses across the board, with staff costs decreasing by 16.8 per cent to S$295.9 million. But the cost of repairs and maintenance rose 13.4 per cent to S$101.7 million.

The group said repairs and maintenance costs are expected to increase with the on-going mid-life refurbishment of the North-east line and Sengkang-Punggol LRT fleet, ageing bus and train fleets, and continued investments in predictive maintenance capabilities.

SBS Transit's earnings per share was 10.45 Singapore cents, compared with 14.39 cents a year ago.

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The group expects revenue from public transport services to be lower compared to the year before. After the circuit breaker, rail ridership was at about 50 per cent of what it was during the pre-pandemic period. Ridership is expected to remain low as working from home continues to be the default mode, and cross-border travels remain restricted.

Bus service revenue is likely to be lower as well, due to lower fuel indexation and reduction in mileage as a result of curtailment of cross-border and selected central business district services.

No interim dividend was declared as a result of the decision to conserve cash. A year ago, SBS Transit had declared an interim dividend of 7.15 Singapore cents.

The counter closed at S$2.82 on Thursday, up S$0.03 or 1.08 per cent.