SMRT – BT

SMRT Q3 net profit dips 5.3%

SMRT Corp’s net profit fell 5.3 per cent year-on-year to $38.3 million for the third quarter ended Dec 31, 2007, even as increased ridership, a higher average taxi hired-out fleet and rental/advertising growth pushed group revenue up.

The earnings fall was because the previous corresponding quarter included exceptional items, a key one being the inclusion of a final contribution from expired cards.

Q3 revenue rose 7.3 per cent to $202.1 million with revenue growth from all sectors. SMRT operates Singapore’s biggest rail network, as well as relatively small fleets of buses and taxis.

But its other operating income dropped 69.5 per cent or about $8.5 million to $3.73 million, in the absence of the exceptional items it saw in the previous corresponding quarter.

Excluding those exceptional items, SMRT Corp said the Q3 net profit figure would have been a $5.4 million or 16.4 per cent improvement to $38.3 million.

‘SMRT has delivered another set of good operating results in Q3 FY08 despite the higher operating cost environment,’ said president and CEO Saw Phaik Hwa. ‘We will continue to pursue opportunities to grow our revenue and at the same time manage costs in all aspects of our businesses.’

Operating profit from the group’s MRT operations in Q3 rose 4.8 per cent to $33 million because of ridership growth. Staff costs were higher. Average daily ridership rose 7.8 per cent to 1.3 million from the previous corresponding quarter.

Meanwhile, Q3 operating profit from buses slumped to $15,000 from $4 million in the previous corresponding quarter because of increased diesel and staff costs, although this was partially offset by higher daily ridership.

The taxi business was back in the black in Q3 with operating profit of $500,000, compared with a loss of $600,000 in the corresponding quarter last year, thanks to a higher average hired-out rate of almost 94 per cent – up from 76.5 per cent.

As usual, rental revenue and advertising did well. Third-quarter operating profit from the rental of retail space jumped 23.4 per cent to $8 million with the redevelopment of more commercial space at various MRT stations. Operating profit from advertising on buses, trains and stations also improved 6.9 per cent to $3.6 million.

Earnings per share in Q3 fell from 2.7 cents to 2.5 cents.

For the nine months ended Dec 31, 2007, net profit attributable to equity holders rose 16.6 per cent to $115.8 million, while revenue rose 6.7 per cent to $593.6 million.

As for the Land Transport Review announcements yesterday and a week ago, SMRT says it is upbeat about the new developments to both bus and rail. It said there are more opportunities to operate and maintain a more extensive rail network, and a good opportunity to grow the bus business beyond current territories. SMRT currently runs only 800 of the 3,700 public buses in Singapore and is restricted to the northern part of the island.

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