SBS Transit has recorded earnings of $32.6 million for 1HFY20, down 27.4% y-o-y. The bottomline was supported by government grants of $61.6 million which helped subsidise wages. If not, the company would have reported an operating loss of $29.4 million.
Total revenue for the six months was $603.2 million, down 14.9% y-o-y. Revenue from public transport services was down 13.4% y-o-y to $586.8 million. Other miscellaneous revenue such as advertising was down as well.
On the other hand, it incurred higher operating costs because of enhanced cleaning and disinfecting costs for their buses, trains, interchanges and depots, as well as the provision of accommodation for Malaysian staff affected by Malaysia border closure in March.
SBS Transit also noted that while ridership did improve after CB measures were lifted, it was much reduced from pre-Covid days and other commercial services continued to be depressed.
Going forward, SBS Transit expects revenue from public transport services to still be lower compared to the same period last year, as working from home remains the default arrangement for many companies. For example, even with the lifting of the circuit breaker, rail ridership is just half that of the pre-Covid-19 level.
Furthermore, bus service revenue is expected to be lower due to lower fuel indexation and reduction in mileage, due to curtailment of cross border and selected Central Business District services.
Revenue from other commercial services is also expected to be challenging, due to the reduced footfall in the train stations and bus interchanges, and the overall poor economic outlook.
Yet, SBS Transit expects to incur higher repair and maintenance costs as its train fleet undergoes mid-life refurbishment. Preventive maintenance is needed on its buses as well.
The company notes that government grants have helped cushion the financial numbers from further drop.
In light of all these, the board has decided not to declare an interim dividend for FY20 in order to conserve cash, and said the final FY20 dividend will be reviewed at the end of 2H20.
Shares of SBS Transit closed at $2.82 on Aug 13, up three cents, or 1.08%.
