DBS lowers dividend forecast for capex-intensive SMRT

Expect just 2 Scts for FY14F.

"On the back of its continued capex needs, we now expect a lower dividend of just 2 Singapore cents for FY14F, down 20% from a year ago," said DBS, comparing it to the FY13 dividend of 2.5 Singapore cents.

DBS also warned investors that SMRT may not come out of its operational slump in the near future. SMRT reported a 57% yoy plunge in its net profit for its latest 2Q14 results due to higher operating costs.

"We maintain our cautious stance on this counter and do not see turnaround in operations as yet," said DBS.

The continued rise of operating costs even led the research firm to cut its FY14F/15F forecasts by 28%/25%, "largely on the back of a higher staff costs, and higher repair and maintenance costs."