Author: tfwee
SMRT – BT
SMRT Q4 net profit falls 5.5% to $34.2m
Higher tax expenses cited; Q4 revenue rises 11.5% to $208.5m
TRANSPORT provider SMRT Corp reported a 5.5 per cent fall in net profit to $34.2 million for its fourth quarter ended March 31.
The year-on-year decline, despite a 74.2 per cent rise in operating profit to $38.8 million, was due mainly to higher tax expenses. There was no reduction in income tax rate this time round compared with a 2 percentage point cut in Q4 2007.
Revenue improved 11.5 per cent to $208.5 million. The increase was due to higher train and bus ridership, stronger taxi hirings and higher rental and advertising revenue.
Q4 earnings per share fell 6 per cent year-on-year to 2.3 cents, from 2.4 cents.
For the full-year, SMRT achieved a 10.7 per cent rise in net profit to $149.9 million while operating profit rose 22.6 per cent to $178 million. Revenue rose 7.9 per cent to $802.1 million, underpinned by earnings growth from train, bus and taxi operations and advertising business.
Train ridership rose 10.9 per cent in Q4 and 7.9 per cent for the full year to a high of 469.3 million.
Full-year earnings per share rose 10 per cent to 9.9 cents a share, from nine cents previously.
SMRT has proposed a final dividend of six cents a share totalling $90.9 million, to be paid on Aug 4.
This will take the gross dividend for FY 2008 to 7.75 cents a share or $117.4 million. In 2007, SMRT paid a final dividend of 5.75 cents a share.
‘Our growth in net profit after tax was on the back of strong ridership growth and a revenue increase from our rental and advertising businesses,’ said SMRT president and chief executive Saw Phaik Hwa.
‘The strong performance mitigated the cost increases we faced due to an increase in GST by two percentage points, higher electricity and diesel costs, and the increase in employer’s CPF contribution by 1.5 percentage points.’
SMRT’s operating costs went up significantly in 2007, with energy costing $13.8 million or 18.1 per cent more at $89.7 million, due to higher electricity and diesel prices.
Electricity costs were up 19.4 per cent year-on-year, while diesel costs rose 16.7 per cent.
SMRT’s new six-month electricity contract with Senoko also dictates rates 15 per cent higher than its previous contract that ended on March 31 this year.
‘Costs go up and come down, but we will manage our top and bottom lines by increasing our productivity and efficiency, and driving revenues,’ Ms Saw said. ‘We do a lot to try and increase the top line, and it is evident that the cost increases are significantly lower than the increase in profits.’
SMRT expects robust ridership growth on trains and buses to continue to drive revenue. It also hopes for higher rental revenue due to the redevelopment of various MRT stations.
It expects operating costs to rise in line with higher energy prices and hiring in preparation for the opening of the Circle Line Stage 3.
SMRT shares closed one cent lower at $1.76 yesterday.
SFI – BT
SFI posts 29.7% rise in Q1 net to $12.87m
This is despite firm’s revenue rising just 2.2%; turnover from S’pore ops up 13.1%
SINGAPORE Food Industries (SFI) yesterday reported a 29.7 per cent year-on-year rise in first-quarter net profit to $12.87 million, despite revenue rising just 2.2 per cent.
Turnover for the three months ended March 31 was $176.37 million, while earnings per share were 2.5 cents, up from 1.9 cents a year earlier.
Turnover from Singapore operations rose 13.1 per cent to $65.1 million, while profit before tax rose 14.4 per cent to $7.5 million. Sales from food distribution here came in at $35.5 million – up from $32 million. But higher costs, especially for external storage and transport, led to a lower profit before tax from the segment.
Food catering sales rose because of higher consumption at higher prices, while revenue from abattoir operations and hog auctions increased on higher pig numbers and higher slaughter fees. In contrast, revenue from UK and European operations dropped 4.6 per cent to $101 million and profit before tax dipped 13.5 per cent to $7.2 million, mainly due to the stronger Singapore dollar against the British pound.
Denominated in pounds, sales from UK and European operations rose 3.4 per cent, but profit dipped 2.8 per cent.
SFI chief executive Roger Yeo said: ‘Both Singapore and UK operations delivered improvements in their underlying business performance. However, the strong Singapore dollar had an adverse impact when translating the pound sterling results of our UK operations into Sing dollars.’
SFI is upbeat about its prospects here, saying the ‘renewal of our key catering contract in Singapore is a positive development’.
‘The catering business will face cost pressure on raw materials and labour, but this is somewhat mitigated by a price-adjustment mechanism under the contract with our key customer,’ it added.
UK operations are also expected to do well in local currency (pound) terms, and SFI has forecast higher earnings this year.
SMRT – DBS
Get on board for dividends
Story: Full year earnings came in slightly ahead of our expectations, up 11% yoy to S$150m as revenue grew by 8% yoy to S$800m, driven primarily by ridership growth on its MRT trains. EBIT grew 23% yoy, led by the MRT segment (+25% yoy), rental and ads (+22% yoy) and a turnaround from a loss of S$5.1m for the taxi segment to a profit of $0.6m. A final net DPS of 6 Scts was declared, bringing total DPS for FY08 to 7.75 Scts, above our 7.5 Scts forecast.
Point: SMRT continues to impress with effective cost management and with strong ridership growth, the Group’s profitability has scaled well, with EBIT margin expanding from 15% five years ago to over 22% currently. Looking ahead, we expect earnings growth to slow down as it comes from a higher base and as the group faces higher cost pressures, as well as likely start-up costs for the new circle line (Stage 3 is targeted to open in mid 2009). Nonetheless, we expect ridership growth and increasing rental income to continue to underpin steady earnings growth.
Relevance: With a formal policy of aiming to maintain or improve the absolute amount of dividends each year, and given SMRT’s generous track record (c. 80% the last 3 years), we are optimistic that shareholders can look forward to growing dividends as the Group continues to grow. We raise our DPS forecast to 8.5 Scts and 9 Scts for FY09 and FY10 respectively. As such, we raise our TP to S$2 (target 4.5% net yield for FY10) and upgrade the stock to a BUY.
Furthermore, SMRT has highlighted the possibility of giving a special dividend, which we believe has a high likelihood as we project the Group to move into a net cash position this year. We estimate that SMRT can pay another 10-15 Scts in special dividends with internal funds, without crossing the 0.5x Net Debt-to-Equity mark.
SMRT – BT
Singapore’s train operator SMRT Corp reported slightly lower profit in the fourth quarter on Tuesday as a result of higher oil and maintainance costs.
Net profit fell 5.5 per cent to $34.2 million or 2.2 cents a share in the the three months to March 31 2008, from $36.2 million or 2.4 cents a year ago.
A statement from SMRT said revenue grew 12 per cent to $208.5 million. ‘The strong performance mitigated the cost increases we faced,’ Chief Executive Officer Saw Phaik Hwa said in the statement.
The company’s energy costs rose 18 per cent to $89.7 million last year because of costlier electricity and diesel as well as higher consumption.
For the full year, net income increased 10 per cent to $149.9 million as more people travelled by SMRT’s trains, buses and taxis.
Shares of the company fell 1 cnet to $1.76 when the stock market closed.
Source from — BT ONLINE