KTB expects 20% increase in stage bus revenue

KUALA LUMPUR: Konsortium Transnasional Bhd (KTB), which is still hoping for approval to raise bus fares, is expecting a 20% increase in its stage bus services revenue this year, driven by its Stage Bus Service Transformation (SBST) project with the Land Public Transport Commission (SPAD).
KTB's executive director and chief operating officer Tengku Hasmadi Tengku Hashim said he is still looking for a 30% increase in bus fares, proposed two years ago, on the premise that prices were last raised in 2008.
"We have been awarded the SBST scheme by SPAD and we are going to start in Seremban this April. It will contribute about 20% to our overall stage bus revenue," he said at the company's EGM here yesterday.
Under the contract, KTB will allocate close to 100 new Cityliner buses in Seremban town, whereby the routes, operational cost and fares will be determined by SPAD.
He noted that the company's turnover is RM280 million per annum with stage bus services contributing 25%, while the remaining 75% is from its express services operation. KTB holds a 20-25% share of the express bus operations market.
"For stage buses, we are currently in six areas, namely Pahang, Kelantan, Negeri Sembilan, Selangor, Seberang Perai and Kedah, which is probably about half of the country," he said.
Commenting on the impact of the Goods & Services Tax (GST) implementation to its business, he said the company expects higher operating costs going forward, as it will absorb the 6% tax charge.
"GST implementation this coming April will have a significant cost (increase) in our operations, because whatever we pay, we have to pay with GST, and we cannot collect GST from our passengers as our industry has been labelled as GST exempted."
"If the fare cannot go up, it means there will be additional costs from April onwards. Somehow SPAD must acknowledge this. I hope the regulators out there will understand this situation and take appropriate action," he added.
Meanwhile, the group's chairman and managing director Tan Sri Dr Mohd Nadzmi Salleh said although the company is benefiting from the slump in global oil prices, the company needs to utilise the cash flow to offset its debts, explaining that the company has accumulated losses of about RM148 million.
"Even we make a small profit today ... previously we had made huge losses and it has to be offset by robust cash flow from our operations," he said.
On its expansion plans, KTB plans to expand its fleet size from 1200 buses to 1500 buses this year, by purchasing 189 new buses for its express bus operations, which include Transnasional Ekspress Sdn Bhd, Plusliner Sdn Bhd and Nice Executive Coach.
Moving forward, Nadzmi said the company will continue to maintain its market share and reduce its operating costs.
For the third quarter ended Sep 30, 2014, the company's net profit increased to RM833,000 from a net loss RM2.51 million in the same quarter last year.
However, its revenue fell by 15.82% to RM51.6 million for the quarter, compared with RM61.3 million a year ago.