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NRA Capital Pte Ltd

Written by: Editor (Admin)

Monday 2 Feb 2015

SMRT Corporation - 3Q15 results announcement

3Q15 earnings jump 58% yoy

29.18% increase in non-fare income contributes significantly to bottom line growth

SMRT Corporation (SMRT) posted a 3Q2015 basic EPS of 1.5 cents, up 58.4% from its 3Q2014 number. This higher EPS was achieved primarily on the strength of the non-fare operations, which contributed $29.6m out of a total operating profit of $31.04m. Core MRT operations managed to return to profitability, achieving a net profit of $2.14m from a loss of $0.23m in 3Q2014, while losses in bus operations were reduced to $0.7m from $8.76m. Depreciation and amortization for SMRT increased significantly, reaching $49.9m from $43.2m, and net gearing increased to 79% from 60%.

SMRT operates the North-South Line, East-West Line and Circle Line in Singapore’s MRT system and the Bukit Panjang LRT system, with a total ridership of 185m, along with the SMRT bus network with additional ridership of 91.1m. In addition to the rail and bus lines, SMRT also operates a taxi fleet of 3644 taxis and owns 37,354 square meters of lettable area for rent with a gross occupancy approaching 98.5%.


Key point highlighted:

  • Capital expenditure increased to $111.1m to upgrade the signalling and communication systems for the trains.
  • On a related note, the announcement that the Land Transport Authority (LTA) is moving up the Bus Contracting Model schedule to restructure the bus system in Singapore is a positive development for SMRT.
  • LTA announced a 2.8% fare hike in coming April, which will result in positive revenue contribution for SMRT. We estimated to increase SMRT’s revenue by $24m in FY03/16 assume no ridership grow.
  • Despite recent falling oil prices should reduce the operating costs for transport operators. However, these unlikely to benefit SMRT short to mid-term due to its practiced long hedges system.
  • Rental income have increased 30% yoy to $32.3m from $24.8m, that was due to new contribution from Kallang Wave Mall and higher rental renewal rates of commercial spaces. To date, Kallang Wave Mall reach occupancy of 98.9%.


Our view

At the current share price of $1.71, SMRT is trading at 23x FY2016 consensus P/E , in line with the 5-year average historical P/E ratio of 23x. 


Additional Company Specfic ReportsDate
SMRT Corporation - 3Q15 results announcement
2 February 2015
Additional Sector ReportsDate
Singapore Airlines – press release free 19 March 2015
Hock Lian Seng - Results update premium 4 March 2010
Hock Lian Seng Holdings - Company visit premium 22 January 2010
IPO Watch - Tiger Airways premium 15 January 2010

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