PUBLIC transport operator SMRT Trains posted an 82.4 per cent fall in net profit for FY2023/24 ended Mar 31 to S$7.5 million, from S$42.5 million in the previous financial year.
This was due to a one-time S$40.8 million dividend payout from SMRT Thomson-East Coast Line (TEL) in FY2022/23, consisting of accumulated profits from when the TEL began operations, SMRT Trains said on Wednesday (Jul 31).
The operator’s revenue was up 9 per cent, or S$73.5 million, year on year to S$886.7 million for FY2023/24. This was driven by higher fares and the ongoing recovery of train ridership, said SMRT Corporation’s group chief financial officer, Phua Yung Keat, at the group’s annual review.
SMRT Trains’ operating profit (earnings before interest and tax) of S$6.2 million was similar to the previous corresponding period, and its profit margin was 0.8 per cent.
SMRT operates the North-South Line, East-West Line, Circle Line and TEL.
Lam Sheau Kai, president of SMRT Trains, said ridership for SMRT’s lines was still around 11 per cent below pre-Covid levels.
Except for the TEL, SMRT line ridership in FY2023/24 was around 1.9 million, similar to the previous year. Pre-Covid ridership was above two million.
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From December 2023, the overall cost of bus and train fares increased by 7 per cent, with adult card fares increasing by 10 Singapore cents (for trips of up to 4.2 km) and 11 cents (for trips longer than 4.2 km). The 11 cent bump is the highest on record.
SMRT Trains also slashed costs by S$120 million through personnel-driven cost-cutting measures, which were a key contributor to easing its financial challenges, it said in a statement.
However, this was offset by higher electricity and staff costs.
Electricity costs have “more than doubled” to around S$200 million, from S$100 million previously, in the past two to three years, said Phua. This was especially after Russia’s invasion of Ukraine in 2022, he added.
Staff costs rose as the company increased its number of personnel with the gradual opening of the TEL, the first stage of which opened in January 2020.
The fourth stage opened in June this year, while the fifth and final stage will open in 2026.
Seah Moon Ming, SMRT Corporation chairman, said that on Jul 1, the group began operating under a new structure consisting of two pillars with the aim of achieving stronger growth over the next five years.
The first pillar consists of the group’s regulated public transport businesses – SMRT Trains and SMRT Buses – and its “non-fare” businesses, which include its business-to-business arm Strides and managing agent of retail and advertising spaces Stellar Lifestyle.
In terms of corporate structure, the biggest change is that SMRT Buses is no longer a subsidiary of Strides.
SMRT will also be introducing its rail monitoring system with artificial intelligence, named Overwatch, to all of its lines and depots, which will improve operational efficiency and reliability.
Launched in August 2023 at Kim Chuan Depot, the system is now being introduced to the North-South and East-West lines.
SMRT Trains is a subsidiary of SMRT Corporation, which was delisted from the Singapore Exchange in October 2016 after Temasek Holdings completed a takeover bid.
