SMRT Q3 profits up 64 per cent to $37m

Listed transport operator SMRT Corp posted a 63.5 per cent rise in net earnings after tax to $36.9 million for the third quarter ended Dec 31.

The sterling results came on the back of a 6.6 per cent increase in revenue to $348.5 million, which was fuelled by continued growth in public transport ridership, as well as the group's non-fare businesses.

Expenses inched up by 2.4 per cent to $303 million as rising staff and maintenance costs were partially offset by lower power and fuel costs. Earnings per share in the three months stood at 2.42 cents, up from 1.48.

Net asset value per share rose from 56.47 to 58.32 cents.

The Temasek-owned group's MRT operations posted a 203.3 per cent rise in operating profit to $9.7 million while losses at its LRT business widened by 89.7 per cent to $1.5 million.

But it pointed out that rail operations on the whole were still in the red for the year to date, with losses of $1.1 million. This was partly because of $4.3 million in nine-month losses incurred by the incident-prone Bukit Panjang LRT system, which has been bleeding since it opened in 1999.

SMRT's bus operations went from an operating loss of $462,000 to a profit of $3.4 million. Its taxi business showed the biggest improvement, with operating profit soaring by more than 500 per cent to $4.8 million.

Profit from retail space rental remained its single biggest profit churner, growing 5.4 per cent to $21.8 million. Advertising profit, however, shrank 17.4 per cent to $5.3 million.

SMRT's engineering business went from a loss of $1.2 million to a profit of $310,000 in the three-month period.

SMRT chief executive Desmond Kuek said: "We continue our steady performance in our non-rail businesses but the rail business remains challenging due to higher operating costs associated with improving rail reliability."

As at Dec 31, SMRT was in a net current liabilities position of $220.6 million. It said its payables include balances on 13 new North-South East-West line trains and eight new LRT trains, but added that it had "sufficient undrawn bank financing facilities as well as multi-currency medium-term note programme" to cover these commitments.

It had borrowings amounting to $810.5 million, down from $821.6 million. Its net gearing remained unchanged at 0.77.

At the end of the period, the group's cash and equivalents shrank to $126.3 million, down from $197.4 million at the same time the year before.

For the first nine months, the transport-based group's net earnings grew 17.9 per cent to $82.7 million. Revenue grew 7.1 per cent to $1.03 billion. If the performance is sustained in the final quarter, SMRT is likely to garner its best full-year results since 2012.

AT A GLANCE

NET PROFIT: $36.9 million (+63.5 per cent)

REVENUE: $348.5 million (+6.6 per cent)

This article was first published on January 26, 2016.
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