SMRT reports 10 percent drop in Q1 profits

Rail operator SMRT Corp reported a 10 percent drop in net earnings to $20.1 million for the first quarter ended June 30 as increases in staff cost, depreciation, and repairs and maintenance more than offset a rise in revenue, reported The Straits Times.

Total revenue, including other operating income, rose by 8.6 percent to $336.6 million. Total expenses rose by 10.1 percent to $308.9 million. Staff cost accounted for the single biggest hike of $10 million in absolute terms. Other operating expenses grew by $11.9 million as full-quarter cost associated with Kallang Wave mall, higher contribution to the Public Transport Fund and off-peak travel incentives kicked in.

Income from operations was once again led by the company's non-fare businesses, which saw a 4.8 percent rise in operating profit to $32.1 million. The improvement was led by taxis and rental of retail space.

The core rail business plunged by more than 230 percent to register a loss of $5.7 million - from a profit of $4.3 million same time last year. SMRT said this was largely because of higher costs associated with "an expanded and ageing network, larger fleet, tightened regulatory standards and heightened operational demands".

SMRT's earnings per share worked out to 1.32 cents, down from 1.47 previously. Its net asset value per share was 57.78 cents, up from 56.47. At the end of the period reviewed, SMRT had cash and equivalents of $131 million, down sharply from $207.2 million. This was because of a lower financing cash inflow, partially offset by lower investing cash outflow and higher operating cash inflow.

At the same time, total liabilities fell by 1.3 percent or $21.6 million because of lower trade and other payables, partially offset by borrowings and tax liabilities.

SMRT's net gearing stood at 0.79, up slightly from 0.77. Yesterday, SMRT's share price closed unchanged at $1.46. The stock has been trending downwards from a high of $1.80 in February.