SBS Transit posts 1.5% profit rise for 2019 but warns of rising costs

SBS Transit reported on Thursday (14 Feb) higher revenue and profit for 2019 but cautions that it is dogged by rising costs, especially in the operations and maintenance of its rail business. This despite the recent 7% fare hike, the public transport operator said. It added that it needs to replace an ageing bus and train fleet, as well as attract and retain staff.

The ongoing refurbishing of the trains of the North-East MRT Line (NEL) and Sengkang-Punggol LRT will push up repair and maintenance costs, the company said when announcing its 2019 annual results. In addition, more money will be needed to replace its fleet of ageing buses and trains, as well as invest in ongoing predictive maintenance to improve service reliability. Similarly, it foresees staff costs going up as it strives to retain and attract staff with better pay.

On Thursday, SBS Transit reported a profit of $81.3 million for 2019, a 1.5% rise over the previous year's $80.1 million. But overall revenue rose 4.5% to $1.45 billion, from $1.38 billion in 2018. The bulk of it came from public transport services, with both higher bus service fees received from the Government and rail fare revenue adding up to $1.38 billion. This is a 4.4% increase over the previous year.

The higher rail fare revenue was largely due to a rise in ridership and the 28 Dec fare hike, said SBS Transit, which gets almost all its revenue from its public transport services. Other commercial services contribute just 5%.

Ridership last year grew in all its rail lines, including the SPLRT. Average daily ridership for the Downtown Line went up by 6% to 477,000 passenger trips compared with the previous year while for the NEL, the corresponding figures are 1.6% and 601,000 and the SPLRT, they are 6.7% and 140,000. The company is giving a final dividend of 5.90 cents for each ordinary share, down from 7.10 cents in 2018.

Meanwhile, SBS Transit said it is 'currently unclear' how the outbreak of the coronavirus disease, or Covid-19, will turn out, adding that a 'prolonged outbreak' is expected. "Covid-19 and measures to fight it will result in economic slowdown and lower ridership," it said. The operator, which has an average daily ridership of 3.61 million on its bus and rail networks, is increasing the cleaning and disinfecting frequency of its buses, trains and facilities.