SMRT Q3 profit rises 7.6% to $41.2m

SMRT Corp continued to roll ahead of the general corporate doom and gloom by announcing a 7.6 per cent year-on-year rise in net profit to $41.2 million for its third quarter ended Dec 31, 2008.

Group revenue in Q3 rose 8.4 per cent to $219 million, driven largely by higher train and bus ridership, as well as the rental and advertising business. But total operating expenses grew 9.8 per cent to $174.8 million because of increases in staff and energy costs, and other operating expenses.

Electricity and diesel costs had risen 35.1 per cent to $30.2 million in the third quarter. Q3 diesel prices have tapered off compared with the first two quarters but are still higher against the same period the year before.

Staff and related costs increased 4.2 per cent to $67.5 million because SMRT has been ramping up recruitment for the Circle Line since Q1. The new MRT line will become operational in the middle of this year. SMRT operates Singapore’s biggest rail network, along with a smaller fleet of buses and taxis.

Average daily train ridership grew 8.4 per cent, boosting Q3 train operations revenue by 9.1 per cent to $119.7 million. Operating profits rose 6.3 per cent to $35.1 million.

Revenue from bus operations also improved by 6.3 per cent to $51.3 million on higher ridership too. But an operating loss of $1.2 million was recorded due to the increase in staff, and repair and maintenance costs.

A lower average hired-out fleet hurt taxi operations, with rental revenue declining 10.3 per cent to $17.4 million, and an operating loss of $226,000.

But engineering and other services saw revenue rise 17.9 per cent to $7.9 million in Q3, thanks to higher consultancy revenue from the Palm Jumeirah monorail project in Dubai. Operating profit grew to $1.1 million from $0.4 million in the previous corresponding quarter.

Earnings per share in Q3 rose from 2.5 cents to 2.7 cents year on year.

For the first nine months ended Dec 31, 2008, SMRT’s net profit rose 7.2 per cent to $124.1 million. Year-to-date revenue was 11.5 per cent higher at $662 million. Earnings per share for the first nine months rose from 7.6 cents to 8.2 cents.

Looking ahead, SMRT said revenue from train and bus operations is expected to be higher in the fourth quarter compared with the previous corresponding period, due mainly to ridership growth. But the rate of growth will be lower than the first three quarters.

SMRT may also cut fares because of the difficult economic conditions. Yesterday, it and the dominant bus operator SBS Transit (SBST) announced that they would not be applying to the Public Transport Council for a fare revision this year

SBST, which also runs the North-east MRT Line and two LRTs, said it is ‘looking to pass the savings it will receive from the 2009 Singapore Budget to commuters’. Under the current fare adjustment formula, the maximum fare increase would be 5 per cent.

SMRT will also pass on the Budget savings to commuters and taxi hirers, as well as donate an additional $300,000 to help needy commuters with their transport costs.

‘In addition to not applying for any fare increase this year, SMRT will work closely with the Public Transport Council to pass on savings from the Budget to commuters by reducing train and bus fares,’ said SMRT president and CEO Saw Phaik Hwa.

SMRT shares closed two cents lower at $1.59 yesterday.

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