Non-rail operations a big contributor to SMRT’s profit jump
SINGAPORE — Transport operator SMRT yesterday reported a 20.1 per cent rise in net profit to S$109.3 million for the year to March 31, largely due to a better performance by its non-rail operations. Revenue for the period increased 4.9 per cent to S$1.29 billion.
SINGAPORE — Transport operator SMRT yesterday reported a 20.1 per cent rise in net profit to S$109.3 million for the year to March 31, largely due to a better performance by its non-rail operations. Revenue for the period increased 4.9 per cent to S$1.29 billion.
Its rail operations reported a lower operating profit of S$7.4 million. It included a net property tax refund of S$17.1 million relating to the prior years’ over-assessment, without which rail operations would have suffered an operating loss.
The operations made an operating profit of S$9.6 million the previous year.
SMRT said fare adjustments have not kept pace with rising operating costs over the years and the rail operating landscape continues to be challenging. It expects to incur higher operating expenses due to intensive maintenance and renewal programmes for the ageing network, while running an enlarged train fleet and the commencement of the Tuas West Extension over the next year.
Revenue will also be impacted by the 1.9 per cent fare reduction and cannibalisation by Downtown Line 2 operations, it added.
The group said it has been in discussions with the authorities on the transition to a new rail financing framework and is making progress. Under the framework, its train operations will become asset light to focus on operations and maintenance and will pay a licence charge to the Land Transport Authority.
“SMRT remains focused on improving rail safety, reliability and service quality; and the multi-year projects to renew and upgrade the systems are making steady progress,” said its president and group CEO Desmond Kuek.
SMRT’s non-rail business performed well, with overall operating profit rising 22.6 per cent to S$133.3 million due to improved profitability in the bus, rental and taxi segments. Bus operations posted an operating profit of S$5.9 million compared with a loss earlier, while operating profits from taxis rose 24 per cent to S$17 million on higher taxi rentals and a larger fleet. Rental operating profit increased 4.7 per cent to S$83.4 million due to higher contributions from train stations and bus interchanges.