Revenue from the public transport services business, which comprises bus and rail services, increased by 15.8% y-o-y to $1.5 billion. This was due mainly to higher fuel indexation from higher oil prices, and higher rail revenue from increased ridership.
Demand for rail services rose by 32.9% with close to 360.7 million passenger trips made in 2022 as more people returned to work and leisure activities with the easing of Covid-19 restrictions. This was, however, 18.9% below the pre-Covid-19 levels of 2019.
Revenue from other commercial services grew 10.6% y-o-y to $50.3 million, due mainly to higher advertising revenue as more advertisers resumed their campaigns with the lifting of Covid-19 restrictions as well as from higher rental income.
Group operating costs increased by 14.2% y-o-y to $1.4 billion due mainly to higher fuel and electricity costs as well as staff costs. The group said that the spike in energy prices in the last year pushed fuel and electricity costs up by 74.4% to $259.3 million. Staff costs, which is the group’s largest cost component, increased by 17.6% to $735.9 million due to a competitive labour market.
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As at end-December 2022, SBS Transit’s cash and cash equivalents stood at
The group has declared a final dividend of 5.45 cents per share. Together with the interim dividend of 5.45 cents declared earlier, the group’s total dividend payout for FY2022 comes up to 10.9 cents or a payout ratio of 50%.
Jeffrey Sim, SBS Transit Group CEO says: “As Singapore moves closer to pre-pandemic normalcy, we expect demand for our services to grow, but we are mindful of the increased cost pressures from manpower and electricity.”
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On the outlook, the group is expecting revenue to improve with the Covid-19 restrictions being removed from Feb 13.
Expected growth in public transport revenue from the rail operations will be driven by higher ridership and fare increase granted by the Public Transport Council effective from Dec 26, 2022. Revenue from the bus operations will see a hit from the full-year impact of the revised lower service fees for the five negotiated bus packages which took effect from Sept 1, 2022. Revenue from other commercial services is expected to pick up in line with ridership recovery and improved market sentiments.
Operating costs especially staff costs are expected to be higher due to a tight labour market. High energy prices due to global supply issues are also expected to add to cost pressures.
Given the lowered margins for the extended five negotiated bus contracts coupled by rising operating costs as mentioned above, the group continues to maintain a cautious outlook.
Shares in SBS Transit closed 1.6% higher on Feb 22 at $2.60.
