New government bus contracts introduced last year drove earnings sharply north for transport operator SBS Transit
SBS Transit's net profit surges 70% to record $80m Serangoon MRT station on the North East Line, run by SBS Transit. ST PHOTO: KUA CHEE SIONG

New government bus contracts introduced last year drove earnings sharply north for transport operator SBS Transit (SBST).

The ComfortDelGro subsidiary posted a 70 per cent surge in net profit to a record $80.1 million, it reported yesterday.

Revenue rose 16.1 per cent to $1.38 billion for the 12 months to Dec 31, largely because of higher fees earned with the start of the Seletar bus package in March and the Bukit Merah package in November.

Higher rail ridership from the first full-year operation of Downtown Line 3 contributed as well.

The average daily ridership for the whole line grew by 61.1 per cent to 450,000 trips a day last year, while the North East Line rose 2.7 per cent to 591,000 trips a day.

SBST's operating costs rose by 13.6 per cent to $1.29 billion, with the biggest increase attributable to fuel and energy bills.

Earnings per share rose from 15.15 cents to 25.71 cents, while net asset value per share stood at $1.60, up from $1.44 a year earlier.

Directors recommended a final dividend of 7.1 cents, up from 3.95 cents in the previous year.

SBST's total equity rose by 10.9 per cent to $498.4 million as of Dec 31, fuelled by operational profits.

It posted a net cash inflow of $27.4 million - from new loans raised, net cash generated from operations, and proceeds from the sale of rail assets to the Land Transport Authority under the new rail financing framework.

The firm had short-term deposits and bank balances of $32.7 million as of Dec 31.

After accounting for borrowings of $75 million, it had a net debt position of $42.3 million and a net gearing ratio of 8.5 per cent - versus 39.1 per cent as of the same time in 2017. Its gross gearing ratio was 15 per cent, versus 40.3 per cent as of Dec 31, 2017.

SBST expects public transport revenue to continue to grow. Bus turnover will be higher with full-year contribution from the Seletar and Bukit Merah packages.

It said the rail business will "continue to face challenges from operating and maintenance costs" despite higher revenue expected from the 4.3 per cent fare adjustment effective on Dec 29, while the North East MRT line and Sengkang-Punggol LRT will undergo mid-life renewal of components.

SBST shares closed up four cents, or 1.36 per cent, to $2.98 - the highest in more than 10 years.