SINGAPORE - Transport operator SMRT Corp has hired an air force logistics veteran to take charge of maintaining its trains and tracks. And it has issued a rare profit warning.
Mr Lee Ling Wee, 47, who heads the air engineering and logistics department at the Republic of Singapore Air Force, will lead a new maintenance and engineering division for trains within the Temasek-owned listed company.
He will go on board on May 20.
He joins a slew of new hires - many of whom are ex-military men - brought in by SMRT chief executive Desmond Kuek to help get the beleaguered company back on track.
Mr Lee is by far the most senior. He holds the rank of Military Expert 8 - equivalent to a brigadier-general. In addition to the trains, he will be responsible for the tracks, quality assurance and innovation and power, as senior vice-president of maintenance and engineering.
The other hires include director of human resources Gerard Koh, 42, an army colonel who spent 16 years with the Singapore Armed Forces (SAF), and director of train operations Alvin Kek, 45, a colonel who clocked 14 years with the SAF.
In a statement yesterday to the Singapore Exchange, SMRT said Mr Lee has more than 25 years of experience in engineering and maintenance in the air force.
In a separate statement, it said it has roped in a senior lawyer as an independent director. Mr Patrick Ang Peng Koon, 49, a lawyer with Rajah & Tann, has more than 20 years of experience "in both contentious and non-contentious matters", the firm said.
In yet another statement to the exchange, SMRT warned that it expects to post a net loss for its fourth quarter ending March 31.
"Increasing operating costs without corresponding fare adjustments have adversely affected the group's profitability," it said, adding that it is also registering a $17 million impairment of goodwill in Chinese associate Shenzhen Zona Transportation.
However, it said, the group will remain profitable for the full year ending March 31. It posted a net profit of $95.2 million for the first nine months, down 10.1 per cent.
Net earnings for the previous fourth quarter amounted to $13.9 million, down 59 per cent. Full-year earnings for that financial year came in at $119.9 million - 25.6 per cent lower.
Nomura researcher Chan Wen Jie said he was expecting an impairment for Shenzhen Zona, but did not have the exact figure. He forecast a full-year net profit of $110 million before impairment.
"Dividends are at risk," he said in a report. "The question remains as to whether the company will pay out dividends based on normalised profits or actual reported profits."
Nomura has lowered its target price for SMRT stock to $1.35 from $1.57. The counter has been trading at its lowest levels in more than two years. It closed at $1.58 yesterday, down 1.5 cents.