Annual Report 2020

2020 Annual Report Transport International Holdings Limited 101 Individual Business Units Franchised Public Bus Operations The Kowloon Motor Bus Company (1933) Limited (“KMB”) Unit 2020 2019 Revenue HK$ million 5,559.9 7,092.6 Other income HK$ million 1,033.1 299.3 Total operating expenses HK$ million (6,541.7) (6,982.7) Profit from operations HK$ million 51.3 409.2 Finance costs HK$ million (26.8) (32.1) Profit before taxation HK$ million 24.5 377.1 Income tax credit/(expense) HK$ million 178.8 (62.2) Profit after taxation HK$ million 203.3 314.9 Net profit margin 3.7% 4.4% Passenger volume Million passenger trips 777.5 1,022.9 Kilometres operated Million km 258.6 280.8 Staff number at year-end Number of staff 12,124 12,123 Fleet size at year-end Number of buses 4,009 4,081 Total assets HK$ million 9,678.1 8,927.7 KMB recorded a profit after taxation of HK$203.3 million for 2020, representing a decrease of HK$111.6 million or 35.4% compared with HK$314.9 million for 2019. If government subsidies of HK$895.5 million (2019: HK$137.1 million) were excluded, KMB would record a loss after taxation of HK$692.2 million, representing a decline of HK$870.0 million compared with a profit after taxation of HK$177.8 million for 2019. KMB’s fare revenue for 2020 was HK$5,308.4 million, a decrease of HK$1,558.1 million or 22.7% compared with HK$6,866.5 million for 2019. The decrease was mainly due to the outbreak of COVID-19 and the corresponding anti-epidemic measures implemented by the Government, including suspension of schools, stringent border control measures and work from home arrangements, which resulted in a significant drop in bus patronage. As a result, KMB’s total ridership decreased by 24.0% to 777.5 million passenger trips (a daily average of 2.12 million passenger trips) as compared with 1,022.9 million passenger trips (a daily average of 2.80 million passenger trips) for 2019. Other income for 2020 included subsidies in respect of actual expenditures incurred on fuel, wages, as well as regular repair and maintenance and insurance premium, amounting to HK$895.5 million from the Government (2019: HK$137.1 million). Total operating expenses for 2020 amounted to HK$6,541.7 million, a decrease of HK$441.0 million or 6.3% compared with HK$6,982.7 million for 2019. The decrease was mainly attributable to the decrease in fuel costs of HK$259.3 million as a result of the fall in international fuel prices, the decrease in other operating expenses resulting from the implementation of a number of cost control measures, the decrease in provision for third party liabilities as a result of the implementation of various bus safety measures as well as regular trainings resulted in lower business risks associated with operations; but was partly offset by the increase in depreciation charges. The increase in depreciation charges was mainly attributable to the purchase of new buses for replacement but the impact was lessen following the review of the estimated useful lives of fixed assets to better reflect the actual usage experience.