Group revenue rose 3.5% to $284.8 million due mainly to higher
train, rental and taxi revenue. However, operating profit declined
49.4% to $22.2 million as continued increase in operating expenses
for the fare business is not being offset by fare increases,
resulting in lower Train profit and higher Bus and LRT losses.
Operating expenses rose 11.0% to $272.1 million mainly due to
higher staff costs and depreciation. Staff cost rose 23.4% to
$112.7 million due to increased headcount for train and bus
operations and wage revision, partially offset by the Wage Credit
Scheme. Depreciation net amortisation rose 12.2% to $39.9 million
due mainly to capitalisation of the operating assets taken over
from LTA and a larger bus and taxi fleet.
Repairs and maintenance costs rose slightly by 4.4% to $26.5
million in line with more scheduled repairs and maintenance for
Train operations with higher operational loading and a larger taxi
fleet. Electricity and diesel costs remained flat at $42.9 million
as hedged prices were lower compared to same period last year.
The Group’s total assets declined 13.4% to $1.9 billion from $2.2
billion as at 31 March 2013 mainly due to a decline in cash balance
of $431.7 million after paying $392.7 million for the 17 trains
purchased and operating assets taken over from LTA. The Group’s
borrowings rose slightly to $619.6 million from $609.5 million
while net gearing rose to 64% compared to 8% as at 31 March 2013 as
a result of the lower cash balance.
Train EBIT declined 88.7% to $2.9 million despite higher revenue
due to higher staff costs, depreciation and other operating
expenses relating to security related expenditure2 and insurance.
Bus losses increased to $7.5 million from $5.2 million in 1QFY13
due mainly to higher staff costs, depreciation of a larger fleet,
and higher security related expenditure.
Rental EBIT rose 9.0% to $17.7 million with a 5.3% increase in
average lettable space to 36,714 sqm following redevelopment at
various stations in the network. Advertising EBIT rose 4.5% to $4.8
million with higher revenue following an increase in advertising on
buses. Taxi EBIT rose 45.6% to $2.3 million due to a newer and
larger hired out fleet. Engineering and Other Services EBIT rose to
$0.5 million from $0.1 million due to higher contribution from
consultancy projects and the absence of allowance for trade
receivables.
Details of the operating metrics may be found in attachment.
OUTLOOK AND
PROSPECTS
SMRT's President and Chief Executive Officer, Mr Desmond Kuek,
said: "Our first quarter result reflects continued challenges in
the fare business which negated the improved performances from
taxis and rental. There remain various critical issues that we are
working through with the authorities to derive a sustainable and
equitable model for the trains and bus businesses, and we are doing
our utmost to move speedily to a favourable outcome.
Even as we work through these challenges in the fare business, we
will continue to strive for improvements in our overall operational
performance and expand our commercial revenue stream. The
successful completion of the Woodlands Xchange this year will add
to our retail space and increase commercial contribution."
The next twelve months remain challenging for the Group in the
absence of fare adjustments and continuing absorption of fare
concessions. Operating costs are expected to increase with the
annual wage increment and higher headcount, higher Trains repair
and maintenance, and depreciation from additions of Trains
operating assets as well as a larger bus and taxi fleet. The Group
continues in discussion with the Government on a new rail financing
framework with the aim of a smooth transition which will improve
the overall sustainability of the Trains business. There are also
developments in the Bus operational framework which could lead to a
more viable business model.
Hmm..SMRT's have been losing profit, even during SPH time I
think :o If not the company's most experience tech. for MRT would
still be working liao...