SMRT – Nomura

First look

SMRT posted a 24% y-y rise in 2Q FY10 net profit to S$52.8mn, well ahead of our and consensus estimate of S$39mn. Higher rail margin and profits, other operating income and a lower tax rate were key reasons for the strong results. While management has guided for higher costs in 2H FY10, on the back of higher electricity rates and interest costs, we expect to adjust our FY10F upwards given the strong performance in 1H FY10. Maintain a BUY with a PT at S$1.96.

2Q FY10 well ahead

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