HIGHER bus and train ridership has helped to boost the second-quarter financial results of public transport provider SMRT.
Year-on-year net profit for the quarter was up by 7.7 per cent to $42.6 million this year. Revenue was also up by a healthy 15.1 per cent to $227 million.
SMRT said other factors lifting its latest results included higher rental and advertising revenue, and an increase in revenue from diesel sold to taxi hirers.
Rental revenue from commercial space, for instance, went up by 44.7 per cent to $14.2 million.
Advertising revenue also saw a substantial jump of 25.6 per cent in the quarter to $6 million.
SMRT chief executive Saw Phaik Hwa said: 'SMRT has continued to grow its profits in this quarter. However, volatile energy costs, inflation and higher operational costs will have an impact on our performance.
'The environment is expected to be challenging in the next 12 months and with the preparations for the opening of the Circle Line, we will continue to manage costs and grow our businesses.'
Looking ahead, SMRT expects the price of diesel to remain volatile. Given the high cost of diesel, the group's bus segment is expected to sustain operating losses.
Group operating expenses for the current third quarter are also expected to increase, owing to higher electricity and staff costs, as headcount is expected to be higher with increased preparation work on the Circle Line Stage 3 and increased train runs.
The outlook for the taxi segment remains challenging too, but revenue from train operations is expected to be higher in third-quarter year-on-year results owing to ridership growth.
Rental revenue is also expected to increase because of better rental yield and increased space following the redevelopment of various stations.
Quarterly earnings per share increased 7.6 per cent from 2.6 cents last year to 2.8 cents this year. Net asset value per share was 44.1 cents as at Sept 30, down a notch from 44.7 cents as at March 31.
The board of directors has declared an interim ordinary dividend of 1.75 cents per share.
For the first half, net profit rose 7 per cent to $82.9 million, while revenue was 13.1 per cent up at $443 million.
This article was first published in The Straits Times on Nov 1, 2008.
