SMRT has recorded a net profit of S$109.3 million for Fiscal Year (FY) 2016.
The public transport operator said in a news release on Thursday, April 28, this is up 20.1 per cent from the full-year net profit of S$91 million a year ago.
Group revenue increased 4.9 per cent to $1.37 billion in FY2016, while operating profit improved 14.6 per cent to S$138.5 million.
Overall, rail operations reported a operating profit of S$7.4 million in FY2016, slightly lower than the S$9.6 million in FY2015.
SMRT added that the operating profit recorded in FY2016 included a net property tax refund of S$17.1 million relating to prior years’ over assessment.
Without this tax refund, rail operations would have suffered an operating loss of S$9.6 million.
The operating profit from SMRT's non-rail businesses increased 22.6 per cent to S$133.3 million in FY2016.
Bus operations posted an operating profit of S$5.9 million, which is a 190.6 per cent increase from the previous financial year. Training grants, reliability incentives, lower diesel costs and higher revenue contributed to this large difference, said the transport operator.
Rental operating profits also increased 4.7 percent to S$83.4 million on the back of higher rental revenue contributions from train stations and bus interchanges.
Taxi operating profits rose 24 per cent to S$17 million with higher taxi rental contributions from a newer and larger hired-out fleet.
Higher costs incurred, SMRT claims
Despite the overall rise in profits, SMRT claimed fare adjustments have not kept pace with rising operating costs and the current rail operating landscape "continues to be challenging".
Operating expenses increased by 5.4 per cent in FY2016 to S$1.2 billion. This is a result of higher staff costs, repairs and maintenance costs, and depreciation because of the capitalisation of new buses and taxis and a larger train fleet.
The company said it had engaged a higher head count in rail and bus operations to support a larger train and bus fleet and meet "heightened operational requirements", and had also increased maintenance-related expenditure in tandem with its "commitment to enhance rail reliability". It also says it has incurred higher rail operating expenses due to the intensive maintenance and renewal programmes of the ageing train network.
The commencement of the Tuas West Extension in FY2017 is also expected to result in higher costs.
In addition, the public transport operator expects its fare revenue to be hit by the 1.9 per cent fare reduction in public transport fares that set in on Dec. 27 last year.
Rival operator SBS Transit's Downtown Line 2 will also result in a "cannibalisation" of fare revenue, SMRT added.
Top photo courtesy of Ooi Kang Sheng