<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Credit crunch will not affect SBS Transit's dividend policy
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->BUS and train operator SBS Transit (SBST) will stick to distributing at least half of its profits as dividends despite the credit crunch.
Chairman Lim Jit Poh, in a statement at the company's annual general meeting yesterday, said dividends in recent years appeared higher largely because the company had been using up its Section 44 tax credits. This refers to a transitional period from the previous tax regime.
Mr Lim noted that 'analysts were not happy' at the release of SBST's 2008 year-end results because of 'the quantum of our dividend payout'.
SBST posted net full-year earnings of $40.6 million, $50 million, $56.1 million and $51.5 million for last year, 2007, 2006 and 2006, respectively.
Correspondingly, it declared final dividends of 3.6 cents for last year, from 3.25 cents in 2007, 6.5 cents in 2006 and 5 cents in 2005. These figures excluded special payouts.
'Analysts say that this is a sharp drop compared to the previous years,' Mr Lim said. 'We have always said that if we have no use for our excess cash, we will declare more dividends.
'But with the current credit crunch, our cash-flow management strategy has served us well.'
SBST has to invest more in new buses as well as manpower to meet higher service standards set out by the Public Transport Council (PTC).
The operator, majority-owned by ComfortDelGro Corp, has rolled out 500 low-floor buses since November 2007 at a cost of $180 million. By the end of this year, it expects to put 400 more buses worth $147 million on the road.
Early this month, the PTC fined SBST - as well as its rival SMRT Corp - for not meeting service standards.
It is the third time that both operators have been fined since the council was authorised by the Government in 2006 to mete out financial penalties.
Mr Lim also noted that SBST has braced itself for harder times by 'cutting costs where necessary'.
=> And up the Papaya directors' pay?
'We are currently living in unprecedented times,' the chairman said. 'The world has all but plunged into recession. Banks are not behaving like banks because they are too cautious in lending money for business.
'In short, the entire business structure is near collapse.'
Mr Lim said senior staff have been told to suspend 'all capital expenditure unless it is mission critical'.
'Additionally, all senior staff have had their salaries frozen and bonuses reduced,' he added. 'We have not made any fanfare out of this. We do it as a matter of responsibility. Such is our style and mode of operations.'
=> Why not CUT pay like the rest of the Peasants?
At the AGM, all resolutions set out were passed, including the re-election of Mr Cheong Yip Seng, Mr David Wong Chin Huat and Mr Gan Juay Kiat as directors.
=> Good times continue for the Papayas!
CHRISTOPHER TAN
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->BUS and train operator SBS Transit (SBST) will stick to distributing at least half of its profits as dividends despite the credit crunch.
Chairman Lim Jit Poh, in a statement at the company's annual general meeting yesterday, said dividends in recent years appeared higher largely because the company had been using up its Section 44 tax credits. This refers to a transitional period from the previous tax regime.
Mr Lim noted that 'analysts were not happy' at the release of SBST's 2008 year-end results because of 'the quantum of our dividend payout'.
SBST posted net full-year earnings of $40.6 million, $50 million, $56.1 million and $51.5 million for last year, 2007, 2006 and 2006, respectively.
Correspondingly, it declared final dividends of 3.6 cents for last year, from 3.25 cents in 2007, 6.5 cents in 2006 and 5 cents in 2005. These figures excluded special payouts.
'Analysts say that this is a sharp drop compared to the previous years,' Mr Lim said. 'We have always said that if we have no use for our excess cash, we will declare more dividends.
'But with the current credit crunch, our cash-flow management strategy has served us well.'
SBST has to invest more in new buses as well as manpower to meet higher service standards set out by the Public Transport Council (PTC).
The operator, majority-owned by ComfortDelGro Corp, has rolled out 500 low-floor buses since November 2007 at a cost of $180 million. By the end of this year, it expects to put 400 more buses worth $147 million on the road.
Early this month, the PTC fined SBST - as well as its rival SMRT Corp - for not meeting service standards.
It is the third time that both operators have been fined since the council was authorised by the Government in 2006 to mete out financial penalties.
Mr Lim also noted that SBST has braced itself for harder times by 'cutting costs where necessary'.
=> And up the Papaya directors' pay?
'We are currently living in unprecedented times,' the chairman said. 'The world has all but plunged into recession. Banks are not behaving like banks because they are too cautious in lending money for business.
'In short, the entire business structure is near collapse.'
Mr Lim said senior staff have been told to suspend 'all capital expenditure unless it is mission critical'.
'Additionally, all senior staff have had their salaries frozen and bonuses reduced,' he added. 'We have not made any fanfare out of this. We do it as a matter of responsibility. Such is our style and mode of operations.'
=> Why not CUT pay like the rest of the Peasants?
At the AGM, all resolutions set out were passed, including the re-election of Mr Cheong Yip Seng, Mr David Wong Chin Huat and Mr Gan Juay Kiat as directors.
=> Good times continue for the Papayas!
CHRISTOPHER TAN
