SBS Transit Ltd’s Latest Earnings: What Investors Should Know

SBS Transit Ltd (SGX: S61) reported its fiscal first-quarter earnings yesterday. The reporting period was for 1 January 2016 to 31 March 2016.

SBS Transit is a subsidiary of land transport giant Comfortdelgro Corporation Limited (SGX: C52). Singaporeans may recognize SBS Transit’s namesake bus and mass rapid transit (MRT) services that it provides. With that, it may not be a surprise to know that the company has two business segments, namely Bus and Rail.

You can learn more about the company in here and here. You can also look up the previous quarter’s earnings here.

Financial highlights

The following’s a quick take on some of SBS Transit’s latest financials:

  1. Quarterly revenue for SBS Transit rose by 6.6% year-on-year to $263 million.
  2. Net profit attributable to shareholders soared 70% higher to $8.1 million. The transport company benefited from sharply lower fuel and electricity costs.
  3. As a result, earnings per share (EPS) increased by 70% from 1.54 cents in the first-quarter of 2015 to 2.61 cents in the reporting quarter.
  4. For 2016’s first-quarter, cash flow from operations was $40.5 million with capital expenditures clocking in at $4.9 million. This puts SBS Transit in positive free cash flow territory to the tune of $35.6 million. It’s a big improvement from the same quarter a year ago when there was negative free cash flow of $48 million (a negative $8.1 million in cash flow from operations and capex of $40.3 million).
  5. As of 31 March 2016, SBS Transit had $4.8 million in cash and equivalents and a sizable $278.5 million in debt. That said, the bus and rail services provider has seen its balance sheet improve from the previous sequential quarter, when it had $4.4 million in cash and equivalents and $337.5 million in debt.

In short, SBS Transit had reported a solid quarter of revenue and profit growth. The transport company also logged-in positive free cash flow and reduced its debt position substantially over the previous quarter.

Operational highlights

For the Bus segment, total revenue reported was $198.5 million, an increase of 1.2% year-on-year. Average daily ridership increased by 3% to 2.9 million passenger trips for the reporting quarter. The segment’s operating profit spiked by 133.4% year on year to $7.3 million.

Meanwhile, the Rail segment registered a healthy 27.4% year-on-year growth in sales. The segment’s revenue was $65 million. The segment’s operating profit was $3.7 million, unchanged from a year ago.

Looking forward, SBS Transit’s management team sees higher revenue from the Rail business. But, Bus revenue will be affected from the transition out of the Bulim and Loyang bus services. Repairs and maintenance costs are also expected to be higher.

At its closing price yesterday of $2.36, SBS Transit traded at around 36 times trailing earnings with a dividend yield of around 1.1%.

To learn more about Foolish investing and to keep up to date on the latest financial and stock market news, sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.