SBS Transit

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The Straits Times
www.straitstimes.com
Published on Aug 11, 2012
SBS Transit hit by bigger bus losses
Net earnings drop 57% for first half because of lower average fares

By Christopher Tan senior correspondent

BUS operator SBS Transit posted a 57 per cent plunge in net earnings to $9.39 million for the six months to June 30 as lower average fares led to bigger bus operation losses.

If not for better profit from its advertising business and higher ridership all round - which propped up revenue by 4.8 per cent to $387.49 million - the listed subsidiary of transport giant ComfortDelGro Corp might have slipped into the red.

Bus operating losses in the first half widened to $8.52 million, from $980,000 for the same period last year. The division was hit by higher staff costs, higher depreciation from new additions to the fleet, higher repair and maintenance costs and higher fuel costs.

Directors are not optimistic about things turning around in the second half, either.

First-half rail operating profit shrank from $10.97 million last year to $3.74 million. The division took a hit from higher staff costs as the company ramped up for the opening of Downtown Line Stage 1 next year. Higher electricity costs also diluted rail earnings.

Advertising emerged as the biggest money spinner, with an operating profit of $11.74 million, up from $11.63 million last year.

Rental of retail space raked in $4.97 million, down from $5.09 million.

SBS Transit's cash and equivalents plunged from $29.12 million last year to $4.87 million in the first half as the operator invested on fleet expansion.

Earnings per share stood at 3.04 cents for the period, down from 7.01 cents previously while net asset value per share stood at 108 cents at June 30, from 107 cents on Dec 31, 2011.

In contrast, Vicom, the other listed ComfortDelGro unit, turned in a sterling interim as motorists kept their cars longer in the light of steep COE prices.

Vicom posted an 11.2 per cent rise in net profit to $13.53 million as revenue grew 7.9 per cent to $48.25 million.
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(Vested in VICOM, but not vested in SBS Transit)

Downtown Line costs soar by more than 70 per cent

A spike in construction cost has contributed to the MRT Downtown Line bill rising by more than 70 per cent from an original estimate of $12 billion to $20.7 billion.

Half of this $8.7 billion increase was attributed to a sharp rise in construction cost, with the other half linked to a number of changes to the project.

This was revealed to The Straits Times by the Land Transport Authority (LTA), which also said it is taking steps - like inviting more firms to bid for projects - to rein in prices.

The Downtown Line will link the north-western and eastern parts of Singapore to the Marina downtown, with the first stage due to open next year, and two other stages in 2015 and 2017.

When the line was announced in 2008, the LTA said that it would cost $12 billion. The latest price tag appeared in this year's Budget statement.

The changes adding to costs include expanding the capacity of the depot in Gali Batu near Woodlands, more stringent safety and regulatory requirements, and more connections to nearby developments to make the line more accessible.

For example, Downtown Line Stage 3's Tampines and Expo stations will each have an additional entrance.

The project is also slightly longer than when it was first announced in 2008. It is 42km long, with 34 stations - from the original 40km and 33 stations.

But construction cost remains the single biggest factor for the cost spiral. LTA deputy chief executive Chua Chong Kheng said that the increase in construction cost from late 2007 to mid-2008 was "quite significant".

He attributed this partly to the deluge of infrastructural projects locally as well as overseas - especially in China - which caused a shortage of building materials, equipment and manpower.

"SBS Transit on Friday reported a 40.9 per cent drop in net profit in the third quarter from the year-earlier period to S$6.2 million, even as revenue rose by 5.9 per cent to S$203.8 million.

The transport operator said turnover benefited mainly from the increase in average daily ridership but the financial performance was hurt by higher expenses, including additional staff and maintenance costs."

http://www.todayonline.com/Business/EDC1...-down-40,9

Will the increase of the expenses eventually be transferred to commuters? or to tax payer?

I think it is matter of time before the additional expenses are passed to us. Transportation in SG is relatively cheap as to many developed countries like South korea (where i am now)

I would say if fares were not regulated as of now, we would be paying more

(09-11-2012, 11:09 PM)CY09 Wrote: I think it is matter of time before the additional expenses are passed to us. Transportation in SG is relatively cheap as to many developed countries like South korea (where i am now)

I would say if fares were not regulated as of now, we would be paying more

The transport operator(s) now has more excuses to increase fare, with more "commuter friendly but non-profitable improvement(s)" recently IMO

As commuter, i wouldn't mind fare increment, as long as it goes along with service improvement.

ugly ugly ugly.

ok U think now a gd price to enter?

(16-02-2013, 07:06 AM)pianist Wrote: ok U think now a gd price to enter?

SBS is not on my watchlist - but i am staying away from transport counters until the whitepaper on transport. Anyway, with rising fuel (brent nearing 120), rising labor and all the madness over foreign labor, failure to raise fares, i doubt if there can be any turnaround in the near term for buses (and perhaps rail).

recent moves from the G seems to suggest a greater government role (lighter asset structure of the operators, opening up the Jurong-CBD to private operators with G taking the revenue but paying the operators the fixed). This is good i think for the general public.

Personally i prefer to have a better insight into the future cashflows stemming from future policies - i might pay more for waiting, but i am more reassured.

SINGAPORE: A committee looking into ways to make public transport more affordable hopes to come up with a framework to adjust various concession schemes, as well as suggest new concession schemes and groups.

It believes these will address the issue of affordability for specific groups of commuters in a more effective and systematic manner.

Chairman of the Fare Review Mechanism Committee, Richard Magnus, outlined the terms of reference of his committee in a blog post on Monday.

Mr Magnus said the average-income households and individuals will get special attention.

He said if one looks merely at the statistics, they would not show up as a possible group that might need help.

They spend an average of only 3 to 4 per cent of their household income on public transport fares.

Generally, they should find fares quite affordable.

However, Mr Magnus pointed out that this is not a homogenous group, as some use public transport frequently and spend about S$120 or more each month on fares.

He said it's worth looking at ways to help them cap their monthly public transport expenses, such as through a monthly adult pass.

The committee is also concerned about other commuter groups like the low-income earners, who sometimes forego better job opportunities farther from home to save on transport expenses.

It'll also look at groups like the disabled community and polytechnic students.

Mr Magnus said the committee is also mindful of the need to find ways to keep Singapore's public transport system financially viable.

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seems like sbs is treated like a whipping dog..is that what ptc can do best to improve service?

SINGAPORE: Stiffer penalties will be imposed on public transport operators if they don't meet Quality of Service (QoS) standards for basic bus services from April.

The Public Transport Council (PTC) said on Monday that it will raise the penalty quantum significantly to a range of between $2,000 per day per bus service and $100,000 per month per standard.

Currently, it ranges between $100 per day per bus service and $10,000 per month per standard.

The PTC said it wants to send the message that it takes a serious view of lapses, and expects public bus operators to keep service lapses to the minimum.

More and more "free" or "subsidized" proposals. Prospect of SBST/SMRT doesn't seem good...

MP proposes free travel on public transport before peak hours

SINGAPORE — Member of Parliament for Pasir Ris-Punggol GRC Janil Puthucheary has raised the idea of free travel on public transport before peak hours to encourage commuters to change their travel patterns.

Speaking during the Budget debate in Parliament today, Dr Puthucheary urged public transport operators to consider providing commuters free travel within a certain time period outside rush hour. This could reduce the crush during peak hour travel.

http://www.todayonline.com/singapore/mp-...peak-hours