PERAK TRANSIT UPBEAT ABOUT GROWTH
Company also eyeing more integrated public transportation terminal deals
PERAK Transit Bhd is expecting better earnings growth this year as the Covid-19 vaccination programme will lead to the reopening of the economy and encourage more travelling, resulting in improved passenger footfall and ridership.
The company also has plans to secure more integrated public transportation terminal (IPTT) deals after having secured two contracts this year.
“We have secured two contracts thus far. The first contract is with Energetic Point Sdn Bhd to comanage Terminal Sentral Kuantan (TSK) while the second, with NSS IT Solution Sdn Bhd, is to manage the commercial area of
Terminal Bas Shahab Perdana (TBSP), the main express bus terminal in Alor Star,” Perak Transit director Datuk Mohd Gazali Jalal told the New Straits Times.
TA Securities Holdings Bhd recently said earnings potential was significant for TBSP in particular, considering the low investment cost of RM6.5 million and monthly management fee of RM20,000.
“We have factored in yearly revenue of RM1.5 million for financial years 2022 and 2023, assuming that renovation works are completed by year end,” said the research firm in a report.
As for the collaboration with Energetic Point, TA Securities said Perak Transit would receive a fixed monthly payment of RM100,000.
“Overall, we are positive on this agreement, which we see as a lucrative long-term investment that could potentially generate an internal rate of return of 40 per cent,” TA Securities noted in another report.
Perak Transit said demand for public transportation was set to grow as the economy got back on course and the government embarked on initiatives to further improve the public transportation system.
“Therefore, we are well positioned to capitalise on any terminal management opportunities based the company’s experience and track record in the public transportation sector.”
Gazali said the company had
agreed not to increase the advertising and promotional rental rates as well as provided discounts to shop owners and kiosk tenants last year.
On capital expenditure for maintenance, renovation and upgrading works at all terminals this year, he said Perak Transit had set a RM25 million to RM35 million allocation.
“In the second half of this year, the group also plans to start work on another IPTT, Bidor Sentral. However, as the development of Bidor Sentral involves building an entirely new IPTT, the construction is expected to take two years.”
In an exchange filing, Perak Transit said the development of
Bidor Sentral and Terminal Tronoh, both in Perak, were within the group’s long-term expansion plan.
TA Securities noted that the impact of the Movement Control Order could be felt at Terminal Meru Raya as traffic and footfall had gone down by 30 per cent.
However, the research firm said the impact on earnings was manageable as Perak Transit earned recurring income from the leasing of advertising and promotional areas within the terminal.
Perak Transit had posted a net profit of RM13.19 million for the fourth quarter ended Dec 31 last year on revenue of RM35.26 million.