It may surprise Lantau commuters struggling to get a ride, but New Lantao Bus (NLB) has just posted a loss.
Even more counter-intuitive, it warned earlier this year that it would “rationalise” some of its loss-making South Lantau services.
That it has not done so may be because of a recent piece of good news: it successfully tendered for two new routes between Tung Chung and the HK-Macau bridge.
Kwoon Chung Bus Holdings, NLB’s parent, has just reported a HK$3.6 million loss in its Lantau operations for the first six months, despite an 8% rise in revenue to HK$85.5 million.
In the same period last year NLB, Lantau’s sole bus operator, achieved sales of HK$78.9 million, yielding a profit of HK$2.8 million.
Kwoon Chung attributed the result to a “significant rise in operating costs, including but not limited to fuel, wages, insurance and repair and maintenance.”
The company doesn’t break down the results further.
But it says this year, as in previous years, NLB’s most profitable segments are the Tung Chung routes, such as the Yat Tung shuttle, and its services to Tin Shui Wai, Yuen Long and Shenzhen Bay.
The 2016-17 annual report said these were “still profitable” but:
A large majority of other bus routes are at losses or just break even. In order to maintain its service standards, NLB shall work closely with the Transport Department and the local community to rationalise some of these loss making routes.
Since that was issued in July the company has not cut any services, and Kwoon Chung says the newly-awarded routes to the HZM Bridge would bring “stable and reasonable profits.”
Perhaps the warning was a genuine heads-up to shareholder, or perhaps it was a not-so subtle signal to transport officials.
Lantau News has sought responses from NLB and the Transport Department.
NLB, which runs 124 buses on 23 routes, is a small part of the Kwoon Chung group.
The parent company recorded a 47% slide in profit for the period. Total revenue was $1.16 billion.