The group, majority owned by City of Edinburgh Council, also revealed that boardroom pay rose to more than £864,000, with chief executive Ian Craig’s remuneration nearing £270,000.
With net profits rising to £8.5 million, the firm will pay a dividend of almost £3.3m to its local authority shareholders, which include East Lothian, Midlothian and West Lothian councils.
Edinburgh council transport convener Lesley Hinds said: “We set the company a big challenge last year – to maintain a high level of performance for the benefit of the city and to set up a team qualified, experienced and talented enough to run Edinburgh’s new tram service.
“As we push towards tram launch at the end of the month I’m delighted that both bus and tram operations are such a strong position to thrive as an integrated offer under Transport for Edinburgh.”
Craig, who became managing director of Lothian buses in 2006, now holds the title of chief executive at Transport for Edinburgh, having added the tram network to his brief. Including a £73,438 bonus, his total pay package was worth £269,388 last year, up from £264,196 in 2012.
Kezia Dugdale, the Labour MSP for the Lothian region, said: “People will find it hard to stomach that the man in charge of the trams and buses earns more than the Prime Minister and the First Minister.”
David Cameron earns a combined ministerial and parliamentary salary of £142,500, while Alex Salmond receives £143,680, according to official figures.
Craig said: “2013 was a hugely significant year for us, one full of opportunities and challenges and I’m delighted that we’ve come through so successfully and I’d like to thank everyone in the company for their efforts.
“We can demonstrate first-rate financial performance, engineering and operational quality as well as a new tram operation which has been developed and delivered in time for service launch this month.”
Details of boardroom pay at Lothian, released ahead of next month’s publication of its annual report, shows engineering director Bill Devlin took home £199,078, including a £45,530 bonus.Operations director Bill Campbell and finance director Norman Strachan received the same bonus, taking their pay packages to £197,755 and £197,793 respectively.
Passenger journeys topped 115 million last year, four million more than in 2012 and the highest figure for more than 25 years. The firm earned a record 96 per cent traveller satisfaction rating in a Passenger Focus survey.
Lothian Buses chairman Ann Faulds said: “Financial performance is very good and this year we’re reporting on one of the most successful years in the company’s history.”
Faulds also heads the Scottish planning and transport team at law firm CMS Cameron McKenna, which this month completed its merger with Dundas & Wilson. She added: “However, we’re not complacent and as a board we’ll continue to scrutinise performance and challenge our executive team to maintain these very high standards.”