SMRT posts 8.9% fall in Q1 net profit

Company cites higher energy and staff and related costs

HIGHER energy costs were instrumental in SMRT Corp’s net profit falling 8.9 per cent to $34.8 million for the first quarter ended June 30, 2011.

Singapore’s biggest rail operator was also affected by higher staff and related costs, repairs and maintenance, and other operating expenses, although these were partially offset by lower depreciation.

Operating profit was 8.1 per cent lower at $42.4 million from a year ago even as Q1 revenue increased 7.5 per cent to $253.1 million mainly on higher rail and bus ridership.

The company also enjoyed higher contributions from the Circle Line, stronger taxi rental revenue as well as higher rental and advertising revenue, even as these were offset by a lower average fare for MRT and buses.

Earnings per share fell to 2.3 cents from 2.5 cents previously. No dividend will be declared for Q1.

Revenue from train operations rose 4.2 per cent to $135.0 million on higher ridership but operating profit slipped 18.6 per cent to $22.6 million mainly due to increased energy costs and staff and related expenses.

The group’s electricity and diesel costs in Q1 had surged 32.7 per cent to $40.0 million, while staff and related costs rose 10.9 per cent to $84.6 million with the bigger headcount for Circle Line operations, increased train runs and the absence of Jobs Credit.

As for bus operations, Q1 revenue rose 3.4 per cent to $54.3 million mainly on higher ridership. But operating losses ballooned to $4.4 million from $770,000 in the corresponding period the previous year due to higher diesel cost.

Taxi operations fared better with rental revenue up 15 per cent to $21.0 million mainly with a larger average hired-out fleet.

But operating profit was down 36.8 per cent to $414,000 from $655,000 previously because of higher depreciation and insurance costs.

Q1 rental revenue was stronger, increasing 10.8 per cent to $19.2 million and enjoying a 10.9 per cent hike in operating profit to $15.0 million.

Meanwhile, revenue from SMRT’s engineering and other services jumped 54.2 per cent to $14.0 million with the higher revenue from fleet maintenance and diesel sold to taxi hirers.

This included payment of $0.7 million received for Palm Jumeirah and recognised as revenue in the quarter.

Engineering’s Q1 operating profit of $3.3 million is in contrast to the operating loss of $1.1 million in the previous corresponding quarter’s, due mainly to the fact that no revenue was recognised in Palm Jumeirah while costs for the operation and maintenance there continued to be incurred.

SMRT shares closed half a cent higher at $1.88 yesterday.

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