SBS Transit

SBS Transit: Net profit increased 57.2% to $5m, while revenue rose 12.3% to $235.1m, as bus revenue grew 10.3% to $186.3m, while rail revenue grew 20.9% to $48.9m on higher ridership and average fare. With the opening of DTL, rail ridership is expected to increase, while bus ridership is expected to be sustained. For the quarter, total operating expenses were up 11.7% to $228.4m, with staff cost increasing 14.1% and fuel and electricity costs rising by 8.8%. Staff costs are expected to be higher due to headcount increase arising from the build-up ofr the bus service enhancement program and Downtown Line 2. Meanwhile, renewal and expansion of bus fleet, depreciation and financing costs are also expected to increase. Interim DPS rose from 0.9¢ to 1.25¢. SBS Transit trades at 31.7x annualized 1H14 P/E.