Stagecoach Holdings, the British bus and train operator, has unveiled bumper profits from Hong Kong-based Citybus.
It warned that future margins might be eroded if it has to adopt environmentally friendly diesel.
Reporting the first full-year contribution from the company since its acquisition last year, Citybus in the 12 months to the end of April, generated sales of GBP128 million (about HK$1.5 billion) and an operating profit of GBP21.2 million.
Margins at the group also rose to 16.6 per cent, up from 11.4 per cent in the full financial year before its acquisition.
'The operating margin benefit may be offset to a degree by increased fuel costs if we move towards using more expensive green diesel as recommended by the Hong Kong Government,' Stagecoach said.
'We are, however, still discussing the implications of this with Government representatives and oil suppliers.' Stagecoach said Citybus was now generating about 80 per cent of revenues from its main franchise for Chek Lap Kok and urban Hong Kong routes. The remaining 20 per cent of revenues come from its non-franchised business, which includes cross-border and mainland routes.
