More passengers drive SMRT Q2 profit up 25.3%

SUBWAY operator SMRT Corp yesterday said that its net profit rose 25.3 per cent in the three months to September as a jump in passengers offset higher fuel and electricity costs.

SMRT said that its revenue from trains and buses is expected to be higher in its third quarter due to passenger growth, despite its failure to secure permission to raise train fares from October.

SMRT, which also operates buses and taxis, posted $39.5 million in fiscal second-quarter net profit compared with $31.6 million a year earlier. Its revenue rose 5.2 per cent to $197.3 million.
The firm said that it will pay an interim dividend of 1.75 cents per share, up from 1.5 cents last year.

Passenger use of SMRT trains for the second quarter rose 6 per cent to 116.8 million compared with the same period a year ago, with revenue from the use of its trains up 5.7 per cent to $108 million.

But fuel and electricity charges increased almost 26 per cent to $22.4 million, the company said in its financial statement.

With no adjustment in train fares, SMRT has to fully absorb a two percentage points increase in the Goods and Services Tax (GST) and a 1.5 percentage point increase in employers’ Central Provident Fund (CPF) contributions. This could amount to an annual cost of $11 million, according to Goldman Sachs in a Sept 12 report.

The Public Transport Council last month rejected SMRT’s application to raise train fares, citing the company’s return on total assets of 11.4 per cent that was much higher than that of other transport operators in Singapore and the region. — Reuters

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