SMRT’s Q2 profit down 13.3% to $45.8m

HIGHER operating expenses and lower average fares caused SMRT Corp’s net profit to fall 13.3 per cent to $45.8 million in the second quarter ended Sept 30, 2010.

But group revenue was 7.2 per cent higher at $246.0 million, thanks to strong growth in train and bus ridership and higher rental and advertising revenue.

Singapore’s biggest rail operator said revenue also benefited from the contribution from Circle Line Stages 1 and 2, though this was partly offset by lower revenue from the Palm Jumeirah Monorail project in Dubai.

Revenue from the rail business jumped 7.8 per cent to $133 million. SMRT also runs a fleet of buses and taxis. Revenue from buses rose 7.2 per cent to $54.7 million on higher ridership, while taxi revenue increased 4.5 per cent to $18.7 million on a larger hired fleet.

But average MRT fares fell about one per cent after distance-based fares were introduced on July 3.

At the same time, total operating expenses in Q2 rose 10.9 per cent to $193.8 million, mainly on higher staff, repair and maintenance (R&M) and energy costs.

Staff costs rose 9.6 per cent to $77.8 million after the Jobs Credit scheme ended on June 10.

The opening of the Circle Line also ate into SMRT’s bottom line because despite average daily ridership increasing to 154,000, it is still below the projected ridership of 200,000.

‘Though Circle Line ridership has increased, the losses of Circle Line continue to impact the group results,’ said SMRT president and CEO Saw Phaik Hwa.

Basic earnings per share for Q2 dropped 13.3 per cent to three cents from 3.5 cents.

For the first half, SMRT posted net profit of $84 million, or 16.8 per cent lower than the same period a year ago. H1 revenue was $481.4 million, or an 8.1 per cent rise. H1 basic earnings per share fell 16.9 per cent to 5.5 cents, from 6.7 cents.

An interim ordinary dividend of 1.75 cents per share has been declared, equivalent to a dividend of $26.6 million.

SMRT shares closed unchanged at $2.05 yesterday.

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