SMRT’s Q4 profit jumps 50% to $34m

For the full year, net profit slips 1.1% to $161.1m

HIGHER operating profit, mainly from improved train and bus ridership, boosted SMRT Corp’s net profit by 50.3 per cent to $34 million for the fourth quarter ended March 31, 2011, although this was partially offset by higher income tax expenses.

Q4 revenue rose 8.6 per cent to $244.5 million from a year ago. Earnings per share rose to 2.2 cents from 1.5 cents previously.

For the full year, the operator of Singapore’s biggest rail network posted a net profit dip of 1.1 per cent to $161.1 million on higher staff and energy costs, as well as other operating expenses. Revenue climbed 8.3 per cent to $969.7 million, mainly on higher train and bus ridership, contribution from the Circle Line, higher taxi rental revenue and higher rental and advertising revenue. These were, however, partially offset by lower average MRT fare and lower revenue from Palm Jumeirah. Earnings per share for the full year slipped to 10.6 cents from 10.7 cents a year ago.

A final dividend of 6.75 cents per share has been proposed, taking the total dividend for FY2011 to 8.5 cents per share, or $129.1 million.

‘SMRT has achieved a commendable set of results despite challenges faced during the year such as losses from the start-up phase of Circle Line stages 1 to 3 and the volatility in energy prices,’ said SMRT president and chief executive officer Saw Phaik Hwa.

Revenue from its core rail business rose 9.6 per cent to $527.1 million for FY2011 due mainly to higher ridership even as this was offset by lower average train fare due to the implementation of distance-based fares. The opening of CCL 1 and 2 also boosted revenue. But full-year operating profit was $16.2 million lower at $113.5 million on lower other operating income, higher energy costs and staff and related expenses.

SMRT also runs a fleet of buses and full-year revenue from the operations increased 6.7 per cent to $213.1 million on higher ridership partially offset by lower average fare. Full-year bus operations incurred a higher operating loss of $3.1 million for FY2011 on higher staff expenses because of lower jobs credit, along with higher diesel cost.

Rental revenue from its taxi fleet grew 4.3 per cent to $74.1 million with improved hired-out rates and a larger average hired-out fleet. Still, taxi operations saw a $2.6 million loss against an operating profit of $1.8 million the year earlier due to higher depreciation, higher insurance cost, and higher repair and maintenance costs.

Both rental revenue from commercial space and advertising revenue rose though. The former grew 13.1 per cent to $73.6 million following the redevelopment of various MRT stations, boosting operating profit by $6.1 million compared with the previous year. The latter was 12.6 per cent higher at $25.4 million on an increase in advertising on trains and in MRT stations, resulting in 14.6 per cent higher operating profit.

Looking ahead, SMRT expects higher revenue mainly due to higher train and bus ridership in the first quarter. Group operating expenses are likely to be higher as staff and related costs rise with higher CPF rates and additional headcount with the ramp-up of CCL 4 and 5, the final two Circle Line stages due to open in October.

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