SMRT’s profits swell by 36.8% this quarter

Despite recent LTA fines.

SMRT Corporation registered an attractive first quarter for 2015, revealing a 4.3% increase in revenue to $291.7 million and a 36.8% increase in PATMI (profit after tax and minority interest) to $22.4 million.

According to OCBC, both SMRT’s Fare business and Non-fare business recorded an improvement in operational performance. Operating losses narrowed from $5.5 million in 1Q14 to $1.1 million in 1Q15, boosted by higher ridership and average fares as well as productivity gains; while operating profits climbed 17.4% year on year to $29.9 million for its Non-fare segment.

The company has yet to reach a mutual agreement with LTA, as Singapore’s Transport Minister Lui Tuck Yew recently commented that there was still a “wide gap between SMRT’s expectations and LTA’s position” with regards to the new rail financing model.

Here’s more from OCBC:

As expected, management remained tight-lipped on this issue during the conference call, but highlighted that it hopes to reach a win-win situation with the authorities. According to LTA, SMRT also has ~S$2b of financial obligations from 2014 to 2019 under the existing financing framework. We believe this situation would change once LTA implements a new rail financing model to enhance the sustainability of the transport sector. The recent introduction of the “Government contracting model” for buses is proof that the government is committed to achieving this goal.