Category: SMRT
SMRT – BT
More passengers drive SMRT Q2 profit up 25.3%
SUBWAY operator SMRT Corp yesterday said that its net profit rose 25.3 per cent in the three months to September as a jump in passengers offset higher fuel and electricity costs.
SMRT said that its revenue from trains and buses is expected to be higher in its third quarter due to passenger growth, despite its failure to secure permission to raise train fares from October.
SMRT, which also operates buses and taxis, posted $39.5 million in fiscal second-quarter net profit compared with $31.6 million a year earlier. Its revenue rose 5.2 per cent to $197.3 million.
The firm said that it will pay an interim dividend of 1.75 cents per share, up from 1.5 cents last year.
Passenger use of SMRT trains for the second quarter rose 6 per cent to 116.8 million compared with the same period a year ago, with revenue from the use of its trains up 5.7 per cent to $108 million.
But fuel and electricity charges increased almost 26 per cent to $22.4 million, the company said in its financial statement.
With no adjustment in train fares, SMRT has to fully absorb a two percentage points increase in the Goods and Services Tax (GST) and a 1.5 percentage point increase in employers’ Central Provident Fund (CPF) contributions. This could amount to an annual cost of $11 million, according to Goldman Sachs in a Sept 12 report.
The Public Transport Council last month rejected SMRT’s application to raise train fares, citing the company’s return on total assets of 11.4 per cent that was much higher than that of other transport operators in Singapore and the region. — Reuters
SMRT – BT
SMRT queries council’s ROTA fare hike decision
(SINGAPORE) Singapore’s SMRT, which operates most of the city-state’s subway system, said yesterday that its relatively high return on assets was due to prudent management and should not be used as a reason to keep train fares unchanged.
‘By using ROTA (return on total assets) as a criterion not to grant a train fare adjustment, it could be interpreted as a disincentive for good performance,’ SMRT deputy president and chief operating officer Yeo Meng Hin told Reuters in an e-mail.
Mr Yeo’s comment followed the Public Transport Council’s (PTC) move last week to reject its application to raise train fares, citing SMRT’s ROTA of 11.4 per cent last year, which was higher than that of other transport companies in the region.
SMRT said it was ‘reviewing the matter’ when asked if it planned to appeal the council’s decision or seek clarification as to what constituted an acceptable return on assets.
According to the council, SMRT’s return on assets exceeded those of companies, such as Hong Kong’s Transport International Holdings and MTR Corp and Singapore-based SBS Transit and Singapore Airlines, which ranged from 4 to 9.7 per cent.
SMRT also noted its high return on assets was partly due to its asset-light structure as it did not own the city-state’s subway stations and rail tracks. The company is, however, required to maintain these assets and pay the government a licence fee of one per cent of gross annual fare revenue.
Singapore allows transport operators to apply for fare increases each year using a formula based on changes in the consumer price index and average monthly earnings in the city-state minus 0.3 percentage point for productivity increases. — Reuters
SMRT, SBS – BT
Bus fares to go up from Oct1, no change for train
Rise of 1 to 2 cents; PTC says majority of commuters will see no increase or small increase
LISTED public transport operators (PTOs) SMRT Corp and SBS Transit have succeeded in their application to raise bus fares but not train charges. Bus fares will go up by one to two cents from Oct 1 after the Public Transport Council (PTC) approved a 1.8 per cent increase, but train fares will remain unchanged.
The PTC said the majority of commuters will see no increase or a small increase. It said 52 per cent of all public transport trips by bus and rail will see no increase. But for 10 per cent, there will be a rise of one cent, while the remaining 38 per cent will see an increase of two cents.
In August 2007, SMRT and SBS Transit – which is part of the ComfortDelgro group – had applied to the PTC to increase bus and rail fares.
The council approved an overall fare increase of 1.8 per cent for adult EZ-link bus fares, but no rise for rail fares this year, after taking into account the fare adjustment cap formula introduced in 2005. ‘The PTC has to strike a balance between safeguarding commuters’ interests and ensuring the financial viability of the public transport operators so that they can continue to improve their services over time and sustain their capital investments,’ said PTC chairman Gerard Ee.
He said as part of PTC’s deliberations, the council compared the PTOs’ Rota (return on total assets) with the prevailing Rota figures of companies with similar industry and risk profiles. ‘The comparison suggests that our rail industry is doing much better. Hence, on balance, the PTC decided against raising rail fares, to the benefit of commuters,’ said Mr Ee.
The council also considered Singapore’s economic outlook and the affordability of public transport. It said the economic outlook is positive with the latest GDP growth forecast for 2007 revised upwards to 7 to 8 per cent and the unemployment rate for June 2007 at 2.4 per cent, the lowest in five years.
The public transport affordability indicator has also been on a downtrend for the past four years, indicating that fares have remained affordable for most commuters.
SBS Transit, which operates three-quarters of the public bus fleet, said that one in three of its commuters will not have to pay more. It said that the fare adjustment will yield $9.3 million for a full year but that will only bring partial relief from higher costs. Fuel costs, for example, rose 21.5 per cent or $18.2 million in 2006.
As for SMRT, it said that about 30 per cent of its bus trips will be unaffected by the fare revision.
‘Bus fares continue to remain affordable for the general public even with the 1.8 per cent increase as this is considerably lower than the annual increase in average monthly income per household of 5.7 per cent in 2006,’ said SMRT chief operating officer Yeo Meng Hin. ‘However, the adjustment does not cover the cost increases posted by the two-percentage-point increase in GST and the 1.5-percentage-point increase in employers’ CPF contribution.’
SBS Transit and SMRT have jointly contributed $0.6 million worth of transport vouchers to help needy families. Together with $2.4 million from the government’s Public Transport Fund, vouchers worth $3 million will be given out this year.
SBS, SMRT – BT
SBS, SMRT apply to council to raise fares
PUBLIC transport providers SBS Transit and SMRT have applied to the Public Transport Council (PTC) to raise bus and train fares.
Energy and manpower costs were cited as some of the reasons for the proposed hikes, according to press statements released separately by both companies yesterday.
SMRT said it faces cost pressures in spite of efforts to manage cost and improve productivity. It said that electricity cost has increased by 26.3 per cent from $31.5 million in FY2006 to $39.8 million in FY 2007.
It also said that the high price of diesel has been further compounded by a 3.8per cent increase in the cost of diesel for SMRT buses, from $34.2 million in FY2006 to $35.5 million in FY 2007.
The increase in the Goods and Services Tax (GST) by two percentage points as well as the 1.5 percentage point increase in employers’ CPF contribution alone will negatively impact SMRT’s annual earnings by an estimated $11 million.
It added that the PTC’s fare adjustment of 1.8 per cent still lags rising costs, and will only partially mitigate increases in the cost of fuel and electricity.
SBS Transit said that while the company is still profitable, a fare adjustment is necessary to enable it to invest in its business so as to improve its services to serve commuters better.
SBS Transit said it invested $35 million in its new batch of 100 single-deck buses which will be on the road from the third quarter of this year.
The fare changes, if accepted by the PTC, will be announced next month and could come into effect as early as October.