Chairman and managing director Tan Sri Mohd Nadzmi Mohd Salleh said in a press conference yesterday that the company’s profit margin was thin due to the implementation of the goods and services tax (GST) and was further strained by the weaker ringgit.
The Government approved a 22.6% increase in bus fares which would have been implemented in May but rescinded the move due to the increase in the cost of living, Nadzmi said at the sidelines after a signing ceremony between Nadicorp Holdings Sdn Bhd and the Malaysian Rubber Board for the trial use of environmental-friendly rubber tyres.
“We did appeal earlier for the increase of bus fares and it was supposed to have been implemented in May this year but the grant was withdrawn.
“It has strained our financial performance. If this problem persists into the next year, it will eat into our numbers and we could make losses in 2016,” he said.
For the third quarter ended Sept 30, 2015, KTB posted a net profit of RM633,000, a fall of 24% from RM833,000 in the same period last year.
Revenue came in at RM46.6mil, falling 11.4% from RM52.6mil last year. KTB attributed the drop in performance to lower business volume and high maintenance cost of its aged buses.
“Additionally, GST implementation added to operational costs.
“Management has taken measures to replace the aged buses, focus on lucrative routes, and engaging various strategies to improve the ridership, service to the public and various cost control strategies to reduce cost,” KTB said, adding that the transportation sector was highly sensitive to fluctuations in operational costs such as fuel, tyres and spare parts.
Shares of KTB closed two sen down to 22 sen after an intra-day high of 24 sen yesterday.
The stock has been on a downtrend since peaking at 38 sen in February and mid-March this year.