SBS Transit 3Q 2025 Business Update: Key Financial and Operational Highlights

Overview

SBS Transit Ltd has released its business and financial update for the third quarter (3Q) of 2025, providing a comprehensive look at the company’s operational performance, income statement, and balance sheet as of September 2025. This report contains several developments that may be of significant interest to shareholders and investors, particularly regarding the company’s revenue performance, operational changes, and upcoming shifts in its business portfolio.

Operational Performance

• Average Daily Ridership Growth: The North East Line (NEL) and Downtown Line (DTL) both experienced year-on-year and quarter-on-quarter increases in average daily ridership:
  • NEL: 625,000 in 3Q 2025 (up 3.8% YoY and 5.9% QoQ)
  • DTL: 490,000 in 3Q 2025 (up 1.4% YoY and 6.2% QoQ)

  This growth in passenger numbers is a positive operational trend, potentially supporting future fare and advertising revenue.

• Loss of Bus Package: SBS Transit did not retain the PT220 Tampines bus package in the recent tender. This package will be transferred out from 5 July 2026, following the earlier loss of the Jurong West package in September 2024. The loss of these packages impacts future service fee revenue and is a key event for investors to note.

Financial Performance

3Q 2025 vs 3Q 2024

• Revenue: Decreased by \$9.67 million, or 2.4%, to \$386.45 million. The decline was mainly due to:
  • Public Transport Services: Fell by \$11.20 million, largely as a result of lower service fees from the loss of the Jurong West bus package and lower fuel indexation. This was partially offset by higher rail fare revenue.
  • Other Commercial Services: Increased by \$1.53 million, mainly from higher advertising revenue.
• Operating Costs: Decreased by \$7.29 million, or 1.9%, to \$370.01 million, primarily due to lower fuel and electricity expenses resulting from decreased diesel and electricity prices. However, these savings were partially offset by higher staff costs.
• Operating Profit: Dropped by \$2.38 million (12.6%) to \$16.44 million.
• Interest Income: Declined by \$1.39 million (51.3%) to \$1.32 million.
• Profit After Tax (PAT): Fell by \$3.76 million (20.6%) to \$14.45 million.
• EBITDA: Decreased by \$3.46 million (8.6%) to \$36.68 million.

Year-to-Date (YTD) September 2025 vs YTD September 2024

• Revenue: Decreased by \$45.15 million (3.8%) to \$1,132.32 million. The main driver was a \$49.91 million drop in public transport services, offset by a \$4.76 million increase in other commercial services (mainly advertising).
• Operating Costs: Fell by \$42.18 million (3.8%) to \$1,081.77 million, due to lower fuel, electricity, and maintenance expenses following the loss of the Jurong West package.
• Operating Profit: Dropped by \$2.97 million (5.5%) to \$50.55 million.
• Profit After Tax (PAT): Down by \$6.37 million (12.3%) to \$45.54 million.
• EBITDA: Decreased by \$5.58 million (4.7%) to \$112.52 million.

Balance Sheet Highlights (as of September 2025)

• Total Assets: Decreased by \$81.10 million (7.0%) to \$1,079.57 million. The reduction was mainly attributed to depreciation of vehicles, premises, and equipment, as well as a decrease in short-term deposits and bank balances.
• Total Liabilities: Fell by \$27.87 million (6.3%) to \$413.32 million, mainly due to lower trade and other payables, decreased income tax payable, and reduced lease liabilities.
• Total Equity: Declined by \$53.23 million (7.4%) to \$666.25 million, mainly reflecting dividends paid, partially offset by profits from operations.
• Short-term Deposits and Bank Balances: Dropped by \$35.77 million (9.3%) to \$349.22 million.
• Non-Current Assets: Down by \$49.76 million (17.0%) to \$242.37 million.

Key Issues and Price-Sensitive Information for Shareholders

• Loss of Bus Packages: The company did not retain the PT220 Tampines bus package, which will be transferred out in July 2026, following the earlier loss of the Jurong West package in September 2024. These developments are likely to have a material negative impact on future revenue and profits from bus operations.
• Declining Profits and Lower Cash Balances: The persistent decline in revenue, operating profit, and PAT, alongside a reduction in cash and short-term deposits, may signal continued challenges for the company in maintaining historical levels of profitability and liquidity.
• Offsetting Factors: The company has achieved some offsetting gains through cost reductions (mainly in fuel, electricity, and repairs) and increased advertising revenue. However, these gains have not fully compensated for the loss of high-margin bus packages and lower interest income.

Conclusion

SBS Transit’s latest financial results reflect a challenging operating environment marked by the loss of significant bus packages, lower service fees, and declining overall profitability. While ridership on key rail lines has increased, and cost controls have been effective, these positives have not fully offset the adverse impact on top and bottom lines. The upcoming transfer of the Tampines bus package in 2026 and reduced cash reserves are particularly important for investors to monitor, as they may materially impact the company’s future earnings, cash flows, and ultimately, share price performance.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research and consult professional advisors before making any investment decisions. The information provided is based on the company’s published report and may be subject to change without notice.

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