Friday 29 Mar 2024
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KUALA LUMPUR: Public bus operator Konsortium Transnasional Bhd (KTB) is banking on the commencement of its stage bus service in Negri Sembilan, called the Stage Bus Service Transformation (SBST), to mitigate any negative impact on the company’s  earnings for  the financial year ending December (FY15) from the upcoming goods and services tax (GST).

SBST is a contract awarded to KTB (fundamental: 0.45; valuation: 0.3) by the Land Public Transport Commission (SPAD) last month to provide stage bus services in Negri Sembilan, starting from April this year. The company has been contracted to deploy 100 stage buses.

“We expect SBST to contribute another 20% revenue to our stage bus business in FY15. With this contract, we will have a new stream of revenue in FY15,” KTB chairman and managing director Tan Sri Mohd Nadzmi Mohd Salleh told newsmen after the group’s extraordinary general meeting (EGM) yesterday.

“[Contribution from] stage buses represent about one-quarter of our entire revenue, which could be around RM70 million for FY14,” Mohd Nadzmi said.

This would mean that its annual revenue for FY14 was around RM280 million, up 17% from the RM239.96 million it earned in FY13.

However, Mohd Nadzmi stressed that the numbers have not been finalised yet. KTB is scheduled to announce its fourth quarter FY14 and full-year financials this month.

According to the group’s latest nine-month ended September (9MFY14) financials, KTB’s net profit fell 68% to RM3.74 million, on revenue of RM163.35 million, down 9% from 9MFY13.

Meanwhile, KTB also urged SPAD to review interstate express bus fares, which it claimed have not been reviewed since 2008.

“This year will be the eighth year since the last review in 2008, when the diesel fuel price was  RM1.28 per litre. Bus fares have become irrelevant as diesel fuel ... is now RM1.70 per litre,” said Mohd Nadzmi.

He also said with the upcoming implementation of theGST in April, the industry will become more challenging as this will negatively impact Konsortium Transnasional’s (fundamental: 0.45; valuation: 0.3) bottom line.

“The industry is highly regulated, including our bus fares, which means our operating expenses will be subject to GST. But we cannot pass the burden on to consumers, so we have to absorb it ultimately,” he told reporters.

At the EGM earlier, Konsortium Transnasional’s shareholders approved the group’s proposed capital reduction and rights issue. The capital reduction will see the reduction in the par value of Konsortium Transnasional shares to 10 sen each from the current 50 sen.

The company’s rights issue involves 604.2 million new shares on the basis of three rights units for every two existing shares held.

Konsortium Transnasional closed one sen or 3.03% lower yesterday at 32 sen, with 2.64 million shares done, giving it a market capitalisation of RM128.9 million.


The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on February 18, 2015.

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