SMRT Q4 net profit falls 5.5% to $34.2m

Higher tax expenses cited; Q4 revenue rises 11.5% to $208.5m

TRANSPORT provider SMRT Corp reported a 5.5 per cent fall in net profit to $34.2 million for its fourth quarter ended March 31.

The year-on-year decline, despite a 74.2 per cent rise in operating profit to $38.8 million, was due mainly to higher tax expenses. There was no reduction in income tax rate this time round compared with a 2 percentage point cut in Q4 2007.

Revenue improved 11.5 per cent to $208.5 million. The increase was due to higher train and bus ridership, stronger taxi hirings and higher rental and advertising revenue.

Q4 earnings per share fell 6 per cent year-on-year to 2.3 cents, from 2.4 cents.

For the full-year, SMRT achieved a 10.7 per cent rise in net profit to $149.9 million while operating profit rose 22.6 per cent to $178 million. Revenue rose 7.9 per cent to $802.1 million, underpinned by earnings growth from train, bus and taxi operations and advertising business.

Train ridership rose 10.9 per cent in Q4 and 7.9 per cent for the full year to a high of 469.3 million.

Full-year earnings per share rose 10 per cent to 9.9 cents a share, from nine cents previously.

SMRT has proposed a final dividend of six cents a share totalling $90.9 million, to be paid on Aug 4.

This will take the gross dividend for FY 2008 to 7.75 cents a share or $117.4 million. In 2007, SMRT paid a final dividend of 5.75 cents a share.

‘Our growth in net profit after tax was on the back of strong ridership growth and a revenue increase from our rental and advertising businesses,’ said SMRT president and chief executive Saw Phaik Hwa.

‘The strong performance mitigated the cost increases we faced due to an increase in GST by two percentage points, higher electricity and diesel costs, and the increase in employer’s CPF contribution by 1.5 percentage points.’

SMRT’s operating costs went up significantly in 2007, with energy costing $13.8 million or 18.1 per cent more at $89.7 million, due to higher electricity and diesel prices.

Electricity costs were up 19.4 per cent year-on-year, while diesel costs rose 16.7 per cent.

SMRT’s new six-month electricity contract with Senoko also dictates rates 15 per cent higher than its previous contract that ended on March 31 this year.

‘Costs go up and come down, but we will manage our top and bottom lines by increasing our productivity and efficiency, and driving revenues,’ Ms Saw said. ‘We do a lot to try and increase the top line, and it is evident that the cost increases are significantly lower than the increase in profits.’

SMRT expects robust ridership growth on trains and buses to continue to drive revenue. It also hopes for higher rental revenue due to the redevelopment of various MRT stations.

It expects operating costs to rise in line with higher energy prices and hiring in preparation for the opening of the Circle Line Stage 3.

SMRT shares closed one cent lower at $1.76 yesterday.

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