The Straits Times
Sunday, Nov 03, 2013
Transport operator SMRT Corporation's second-quarter net profit has slumped 56.8 per cent to $14.4 million.
Its MRT services generated lower profit and its bus and LRT losses widened. Revenue rose 5.3 per cent to $296.3 million. But operating expenses were also up, rising 15.8 per cent to $285.8 million, owing mainly to higher staff, repair and maintenance and depreciation costs. This meant that operating profit sank 50.7 per cent to $20 million. Items like finance costs and income tax took net profit down to $14.4 million.
"The fare business remains challenging despite healthy ridership growth as fares have not been adjusted to reflect the higher operating costs," said SMRT in a statement. It noted that MRT and bus operations both performed worse despite higher turnover.
Still, the non-fare business showed healthy growth, with a 10.9 per cent increase in operating profit to $25.8 million, driven by higher profits from leasing out taxis, renting out shop space and displaying advertisements.
Operating profits from engineering and other services fell, owing to higher costs in external fleet maintenance projects.
SMRT said net profit for the six months to Sept 30 fell 55.9 per cent to $30.8 million, despite revenue increasing 4.4 per cent to $581.1 million.
Earnings per share for the half-year came to two cents, down from 4.6 cents in the year- ago period. Net asset value per share was 51.6 cents at Sept 30, up from 50.5 cents at March 31.
It has declared an interim dividend of one cent per share, down from 1.5 cents a year earlier.
"We continue to make good progress in improving service frequency and reliability in our train and bus operations," said SMRT president and chief executive Desmond Kuek in a statement.
"The financials for the fare business remain challenging. We continue to discuss with the authorities on details for a timely transition to a viable and sustainable model for the train and bus businesses."
He said SMRT is growing its non-fare business in Singapore and overseas. The Woodlands Xchange will officially open this month and will contribute to rental profits this year.
"We recently entered a consortium to participate in opportunities in the Jakarta monorail project, which will position us for growth in international markets."
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