In a desperate attempt to justify another fare hike, SMRT CEO highlighted the 8.9 percent fall in 1st quarter profit to $34.8 million, on the back of 7.5 percent rise in revenue to $253.1 million. Put aside for the moment the business anomally how extra revenue generates less income for the train operator. In January SMRT reported net profit after tax for 3Q FY11 was $43.0 million, 9.6% higher as compared to the same quarter the year before. However you look at it, if profit levels of about $120 million a year are considered "break even" numbers, we must really check what PM Lee was drinking when he made that speech.
| SMRT's Profit Ride | |
| 2010 | $162.885 million |
| 2009 | $162.731 million |
| 2008 | $149.939 million |
| 2007 | $135.790 million |
| 2006 | $103.624 million |
| 2005 | $126.552 million |
| 2004 | $89.496 million |
| 2003 | $72.068 million |
| 2002 | $56.797 million |
| 2001 | $102.797 million |
| 2000 | $115.442 million |
Ms Lim, the SMRT's vice-president of for finance, said staff costs rose because of head count, higher CPF contributions and absence of job credits of $1.2 million this year. She also blamed the electrical tariffs which increased 5 to 6 percent this quarter. Excusez-moi, commuters are already hit by the same electrical tariff hike in their utility bill, must they also be whacked with a second whammy by the train operators?
We get a sneak peek at how SMRT runs its business. Ms Lim said the company was moving towards a digital platform of advertising, which means an increase in depreciation costs and headcount. Advertising profits had fallen by 4.9 percent, and they still plan to throw good money after bad. And make the commuters pay for their foolhardiness. This is what happens when you have a DFS sale girl running a public transportation service. Instead of focusing on efficient train turnaround, minimisation of downtime, optimisation of maintenance and spares inventory, they are more enamoured with glitzy ads. Who knows, they may even install the mobile TV screens that irritated bus commuters to no end.
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>>they may even install the mobile TV screens that irritated bus commuters to no end.
ReplyDeleteFor info, the MRT station @ CCK has recently installed a BIG TV screen playing ads non-stop
My favourite part .."if profit levels of about $120 million a year are considered "break even" numbers, we must really check what PM Lee was drinking when he made that speech.." But I guess he needn't worry that someone might do a "Devan Nair" on him.
ReplyDeleteThe worst thing about stepping onto the platforms are the very loud and noisy TVs playing non-stop rubbish. Who watches them anyway?
ReplyDeleteOnce on the train, they have these over-loud announcements (whether to mind the platform gap or suspicious packages or station coming up or interchange...)that are just non-stop and frustratingly irritating! They need to either reduce the number of announcements or lower the volume. Better still, do both and make taking the trains less grating.
When Gerard Ee was on Talking point, I found it pretty hilarious that he and the host kept telling the people that the bulk of their profits come from ad revenue. I really don't give two hoots where their rev comes from..the bottom line nett nett is that SMRT ARE making MILLIONS of profits!! If the DFS girl decides to focus all her energy to generate rev from ad space, so that's her prerogative. Is really convenient for them to leave out the facts that ridership must have gone up significantly due to the 2m add-on in our population, not to mention the 1m tourists that come and go which only exacerbate the problems for commuters.
ReplyDeleteSo end question for PM Lee - Cannot be helped, or Don't want to help?
Profit-centric or Commuters-centric? Again we come back to the moral question - doing the right thing or doing things right? Is it too much to ask for both?
Didn't she say "if the train is full, you can't board just wait for the next one?". We should tell her "if the fare increase can't be done this time, just wait for the next round"..(AFTER she fixed all that bad and crappy service that is).
ReplyDelete//Profit-centric or Commuters-centric? Again we come back to the moral question - doing the right thing or doing things right? //
ReplyDeleteMe think SMRT has not done the right thing, and is not doing rights either!
$162m is high profits not break-evens. Service is crappy like hell.
If the rumor is true about the CEO driving ferrari, she ought to follow Lui & Lim into the ground to get her own taste of bitter and sour medicine before KPKB for more money...
And shame on PM Lee. So much for epochal change! Old wine in new bottle all over again.
Blood suckers.
ReplyDeletewho knows why their profits have gone down this qtr? it didn't take them very long to come up with the number, maybe is becos they have to pay legal bills to accidents that kept happening on their tracks. or they start putting up additional barriers for safety now? or maybe riders are fed up, or keep spending on those useless apps that doesn't give timely bus arrivals instead of crowd sourcing out to better talents who can do a far better job?
ReplyDelete//said staff costs rose because of head count, higher CPF contributions and absence of job credits of $1.2 million this year. She also blamed the electrical tariffs which increased 5 to 6 this quarter//
ReplyDeleteWao now try to tai-chi to the commuters. Who's next? Like that CPF, SPF, PUB, Public Schools , all the mother father GLCs on this island should get us to fund their workers' wages too?!! Where do we end? No need to give these sort of emotional blackmail. We are fighting for a fair and balanced way for millions of commuters. If Ms Saw wants to fight for her workers, then take it from her own profit pockets.
It's amazing that PM Lee actually thinks he has the political capital to persuade the public to accept fare hikes. Lest he forget, he was elected largely because of the expensive carrots he had offered to the self-centred constituents.
ReplyDeletePAP obviously has not learnt its lessons. Thanks to the 60% daft Singaporeans, we can continue to expect ordinary Singaporeans paying for obscene salaries of ministers and CEOs of Temaasek-linked companies.
Public transport operators request for fare hike.
ReplyDeleteMSM supported it.
Chairman PTC agreed with it.
Minister for Transport argued for it.
Prime Minister defended it.
Uniquely Singapore-style business model - many levels of "checks and balances" but only one voice.
The verdict is more or less out.
The fare hike is a forgone conclusion.
Let's look at it in this way. They only have 3-4 years to get as much growth as possible before they have to slow things down and sweeten the ground again for the next election. There is no better time than now for fare hike.
If we are feeling discomfort, bitter or sore, sorry guys, cannot be helped. Where do you think they are going to find money for those multi-billion HDB upgrading projects and growth bonus in five years time. Not forgetting, their own multi-million salary and bonus have to be funded from somewhere. You can be sure, it won't be their pockets.
The most important question to ask is why are our PAP Ministers defending the profitability of public listed companies even if they are public transport providers but in reality they also happens to be indirect beneficiaries of public fare increases ? Is it because every cent increase in public fares will also add to the public coffers and eventually the bonuses of every PAP Minister ?
ReplyDeleteJust like our PM doesn't seem to have any sense of conflict of interests in having his own father and wife being appointed (whether directly or indirectly) in sensitive positions, does he even know that as it is also highly improper for him as PM to defend the profitability of any public listed company for that matter ?
Just imagine Donald Tsang defending Li Ka Shing saying that he is entitled to make reasonable profits for any of his companies providing a public service and what do you think about our PM ? Shameless ?
Pathetic, isn't it? PM, Minister, ex-minister, all lining up to defend the duopoly while their CEOs remain silent. Hmmm...conflict of interests? Lack of transparency...cannot be helped!
ReplyDelete