SMRT Q2 profit plunges 25.6%

Operating expenses rise 15.5% as electricity and diesel costs surge 44%

RISING energy prices continued to take their toll on SMRT Corp, with its net profit falling 25.6 per cent year on year to $34.1 million for the second quarter ended Sept 30.

Revenue for the three months climbed $15.1 million or 6.1 per cent to $261.1 million. This was due mainly to higher MRT and bus ridership, contribution from Circle Line, higher taxi rental revenue, increase in external fleet maintenance revenue and higher rental and advertising revenue, partially offset by lower average fare for MRT and bus.

But total operating expenses rose 15.5 per cent to $223.8 million as electricity and diesel costs surged 44 per cent or $13.3 million to $43.4 million.

The rail and bus operator also faced margin pressure from higher staff and related costs, repairs and maintenance costs as well as other operating expenses, although these were partially offset by higher revenue and other operating income.

Operating profit for the quarter came in 24.9 per cent lower at $42.1 million. Q2 earnings per share fell to 2.2 cents from 3.0 cents in the year prior.

Revenue from train operations rose 6.0 per cent year on year to $140.9 million on higher ridership, partially offset by lower average fare for MRT. But operating profit slid 24.7 per cent to $22.8 million mainly.

Bus operations also registered a 2.0 per cent gain in revenue to $55.8 million. However, the segment chalked up an operating loss of $2.6 million as compared with a profit of $1.4 million in the corresponding period last year.

Taxi operations raked in a gain in revenue of 24.7 per cent to $28.9 million, but suffered a 68.5 per cent decline in operating profit to $146,000 mainly due to higher depreciation and insurance costs.

SMRT declared an interim dividend of 1.75 cents per share.

For the first six months of the financial year, SMRT’s revenue climbed 6.8 per cent to $514.2 million while net profit fell 18 per cent to $68.9 million.

SMRT expects revenue to be higher year on year in the third quarter and the next 12 months due to expected rises in ridership following the opening of all Circle Line stages.

The one per cent net fare adjustment approved by the Public Transport Council for trains and bus fares has taken effect from Oct 8. However, increasing cost pressures, particularly energy costs and staff and related costs, are expected to have an impact on the group’s performance.

SMRT shares closed four cents higher at $1.89 yesterday.

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