Kowloon Motor Bus (KMB) could soon apply for another fare increase. Its management is warning that, for the first time in a decade, it could make a loss.
Hong Kong's largest bus operator - whose profit contribution to holding company Transport International Holdings has shrunk over the years - raised its fares by an average of 3.6 per cent on Sunday.
But the group's managing director, Edmond Ho Tat-man, said the HK$200 million a year the fare increase would generate would not fully cover its fuel costs, which are expected to increase by HK$500 million this year.
'We are not making enough to cover our expenses. If oil prices don't fall, we will be in the red this year,' Ho said.
KMB's listed flagship Transport International, which makes money from leasing and selling property at its former depots and operating local coach services and public transport in Shenzhen and Beijing, reported a net profit of HK$866 million last year, nearly 30 per cent above that of 2009.
More than half the profit came from sales and interest earnings from property projects in Lai Chi Kok, including offices, shopping malls and luxury apartment block the Manhattan Hill. Excluding two one-off gains, its franchised bus operation accounted for just HK$243.3 million of its profits, down 38.4 per cent from 2009.