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|
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.