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SMRT Cuts Dividend as 4QFY2012 Net Profit Drops 59 Per cent

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by Ernie B. Calucag


Public transport operator SMRT Corp reported Monday a 59-per cent decline in net profit for the fourth quarter ending 31 March 2012, no thanks to higher operating expenses and impairment of goodwill on its bus operations.

The group’s bottomline for the period totalled S$13.9 million, down from S$34.0 million a year earlier. This, despite a 12.4-per cent jump in revenues to S$274.8 million from S$244.5 million in the same period last year.

“We faced many challenges in the year in meeting increased ridership, managing an aging system and in dealing with major disruptions. We are putting in place improvements to deliver high service reliability, including the replacement and renewal of certain assets. The taxi business saw a turnaround but the bus business has become very tough,” said Tan Ek Kia, Executive Director and Chief Executive Officer of SMRT.

SMRT declared a reduced final dividend of S$0.057 compared with S$0.0675 a year ago.

The group’s shares have fallen around 7 per cent since it said last week it would spend S$900.0 million to overhaul the train system following numerous breakdowns in recent months.

SMRT said it has identified several areas for long-term renewal and upgrading to ensure “a safe and reliable rail system” for Singapore.

Part of the cost will be borne by the government’s Land Transport Authority.

SMRT’s shares closed lower on Monday at S$1.68 each from last Friday’s S$1.685.