SMRT's profit hit by train woes and high expenses
SMRT reported lower profit for its financial first quarter, with the transport operator again burdened by high expenses and struggling train operations.
Profit after tax for the three months to June 30 was down 10 per cent year-on-year to $20.1 million, even as revenue rose 7.8 per cent year-on-year to $320.3 million, SMRT said, announcing its latest results after the market closed yesterday.
But the revenue growth was largely offset by a 10.1 per cent year-on-year increase in total operating expenses to $308.9 million, "due mainly to higher staff costs, depreciation, repairs and maintenance and other operating expenses", SMRT said in a release.
The expenses rose as headcount increased, but the company also spent more on "a more intensified maintenance regime" in order to keep its ageing MRT and LRT systems in good shape, amid the intermittent incidents of system breakdown that have sparked widespread consumer anger.
As a result, train and LRT businesses did poorly in the quarter. Operating profit from the train unit dropped a massive 174.3 per cent year-on-year to a loss of $3.7 million.
In the LRT unit, operating loss widened from $600,000 a year ago to $1.6 million.
The bus unit turned in a profit of $1.5 million for the quarter, but all three units still saw a loss of $3.8 million, which widened from $1.1 million a year ago.
The non-fare segment fared better, with profit for the quarter rising 5.5 per cent year-on-year to $31.5 million, due largely to an increase in profit from taxi operations and the rental segment. Taxi profit rose 32.2 per cent year-on-year to $5.5 million.
On its outlook, SMRT warned that the public transport operating landscape remains challenging, and the already-high operating expenses are set to keep rising.