Part of SMRT cost cutting measures, the expansion of train rides
have eat into their profit so they need to reduce cost.
May 1, 2010
SMRT's Q4 profit falls 41.4% to $22.7m on higher
costs
By SAMUEL EE
SMRT Corp's net profit for the fourth quarter ended March 31,
2010, slipped 41.4 per cent to $22.7 million on higher staff
expenses and repair and maintenance costs, as well as an increase
in income tax. But Q4 revenue climbed 3.7 per cent to $225.1
million on higher train ridership.
The higher staff costs were due to the opening of the Circle
Line. Stage 3 of this new orbital line was opened for operations in
May 2009, followed by Stages 1 and 2 in April 2010. SMRT said the
rest of the Circle Line - Stages 4 and 5 - will open in 2011.
Earnings per share for the fourth quarter was 1.5 cents - down
from 2.5 cents in the same quarter a year ago. For the full year,
net profit for Singapore's biggest rail operator rose a marginal
0.1 per cent to $162.9 million while full-year revenue inched up
1.8 per cent to $895.1 million. Operating income was higher and the
company benefited from the government's budget measures, lower
energy costs and lower other operating expenses.
FY2010's earnings per share was unchanged at 10.7 cents. A final
ordinary dividend of 6.75 cents per share has been proposed,
bringing the total dividend for the year to 8.5 cents. 'SMRT has
achieved a satisfactory net profit of $162.9 million despite the
fare reduction,' said SMRT president and CEO Saw Phaik Hwa. She
said train ridership for FY2010 had increased 5.2 per cent as
compared with a year earlier. 'We expect the recovery of the
Singapore economy and the progressive opening of Circle Line stages
to continue to contribute to the increase in ridership,' Ms Saw
added.
During FY2010, revenue from train operations rose 1.4 per cent
to $480.7 million due mainly to higher MRT ridership from the
North-South and East-West lines and contribution from Circle Line
Stage 3. Total ridership for the full year had risen 5.2 per cent
to 536.6 million. But the revenue increase was partially offset by
lower average MRT fare.
Operating profit was 0.6 per cent lower at $129.7 million,
mostly because of higher repair and maintenance costs, staff and
related expenses and electricity costs. SMRT also runs a smaller
fleet of buses and taxis. Its FY2010 revenue from bus operations
slipped 3.6 per cent to $199.7 million mainly because of the lower
average fare. A lower operating loss of $1.9 million was incurred
compared with $4.9 million the previous year mainly due to lower
diesel cost, although this was partially offset by the provision
for the fuel equalisation account.
The group's taxi operations posted 1.0 per cent less revenue of
$71 million. Operating profit returned to the black with $1.8
million against an operating loss of $6.3 million a year ago. Two
other businesses also showed strong gains - rental, and engineering
and other services. Rental revenue jumped 13 per cent to $65
million as a result of better yield and expanded space following
the redevelopment of MRT stations.
Operating profit was up 9.4 per cent at $50.8 million. Revenue
for engineering and other services jumped 29.8 per cent to $47.3
million on improved consultancy revenue, partially offset by lower
diesel sales to taxi hirers. Operating profit surged 55.9 per cent
to $9.9 million but this was partially offset by higher allowance
for doubtful debts.
Going forward, Ms Saw said that a 2.5 per cent fare reduction in
accordance with the fare formula would be applied to the overall
fares once the 15-month fare discount of 3 per cent ceases from
July 3, 2010. She added: 'In the next 12 months, volatility in
energy prices and the cessation of government budget measures as
announced in the budget speech 2009 will also impact our
profitability.'
Remember - Our public transport is about making PROFIT!
To that red word, well, I learn Economics in
school. Public transport is a public good, moreover SMRT is a
public corporation, which means they are more concentrated on
providing service than earning profit. I think they are just being
eco-friendly, NOT on earning as much profit as possible.